How to calculate NRR?

NRR (Net Revenue Retention) is a metric that shows how much revenue from existing customers has changed over a certain period, considering expansion, contraction, and churn.

Calculation formula:

[ NRR = \frac{\text{Revenue at end of period from existing customers}}{\text{Revenue at start of period from the same customers}} \times 100% ]

The revenue at the end of the period accounts for:

• Expansion (upsell, cross-sell) — increase in revenue from customers
• Contraction (downsizing) — decrease in revenue
• Churn — loss of customers and corresponding revenue

Example:

• Revenue from customers at the start of the quarter: $100,000
• Revenue from the same customers at the end of the quarter (considering changes): $110,000

Then:

[ NRR = \frac{110000}{100000} \times 100% = 110% ]

NRR above 100% indicates growth in revenue from the existing customer base, which is very positive for the business.