Net Revenue Retention

Metric Name

Net Contracted Annual Recurring Revenue

Metric Family

Bookings

Metric Definition

NRR is the revenue growth or shrinkage from existing customers over a year, accounting for upgrades, downgrades, and churn.

Formula

Net Revenue Retention = (Starting CARR + Change in CARR) / Starting CARR

Application

NRR > 100%: Indicates that the company is growing its revenue from existing customers, even after accounting for churn and downgrades. This is a positive sign, reflecting strong customer relationships and successful upselling strategies. NRR = 100%: Means the company is maintaining its revenue from existing customers, with new sales being necessary for growth. NRR < 100%: Indicates a loss in revenue from existing customers, suggesting issues with customer satisfaction, product value, or market fit.