Paritian

Finance

Net Revenue Retention (NRR) Calculator — Subscription Businesses

Net and gross revenue retention of a group of customers from their starting recurring revenue, the expansion, the downgrades and the cancellations, plus the NRR over a year.

Results

Net revenue retention (NRR) 101.0 %
Gross revenue retention (GRR) 93.0 %
Revenue churn (cancellations + downgrades) 7.00 %
NRR over a year at this pace 101.0 %

What this tool does

NRR asks what happened to the revenue you already had: it adds upgrades and subtracts downgrades and cancellations, and leaves out new customers entirely. Above 100 % the existing base grows by itself even if you win nobody new; below, you must keep filling a leaking bucket. Gross revenue retention is the same without the expansion, so it can never exceed 100 % and shows how much is simply lost. If your period is a month or a quarter, the last result compounds it to a year, which shows why small monthly leaks add up.

Formula

NRR = (starting revenue + expansion − contraction − churn) ÷ starting revenue · GRR = (start − contraction − churn) ÷ start

Variables

SymbolMeaningUnit
m0Recurring revenue at the start from those customers—
exExtra revenue from upgrades and add-ons—
ctRevenue lost to downgrades—
chRevenue lost to cancellations—
pmLength of the period in months—
NNet revenue retention (NRR)%
GGross revenue retention (GRR)%
RCRevenue churn (cancellations + downgrades)%
NANRR over a year at this pace%

Worked example

  • Recurring revenue at the start from those customers100,000
  • Extra revenue from upgrades and add-ons8000
  • Revenue lost to downgrades2000
  • Revenue lost to cancellations5000
  • Length of the period in months12
  • Net revenue retention (NRR)101.0 %
  • Gross revenue retention (GRR)93.0 %
  • Revenue churn (cancellations + downgrades)7.00 %
  • NRR over a year at this pace101.0 %

Limitations

  • The result is an estimate based only on the values you type. Real situations often include factors this calculator does not know about.
  • The tool works with whatever currency you use for the inputs; it does not convert between currencies.