Net Revenue Retention vs Gross Retention

Two retention metrics that look similar and tell different stories. NRR includes expansion. GRR does not. Read both over the same period and customer base.

Last updated: 2026-04-01

Overview

NRR

With Expansion

The percentage of recurring revenue retained from existing customers, after expansion, contraction, and churn. Above 100% means the existing base grew on its own. The table uses annual results from SaaS Capital (2026) for bootstrapped B2B SaaS companies with $3M-$20M ARR.

Best for telling the growth story to investors. Negative net churn (NRR above 100%) is what enables the most efficient SaaS businesses to compound.

GRR

Without Expansion

The percentage of recurring revenue retained, counting only churn and contraction. No credit for expansion. The number is always between 0% and 100%.

Best for measuring product and customer health. GRR shows revenue losses before expansion offsets them.

Formula comparison

NRR

NRR % = (Starting MRR + Expansion - Contraction - Churn) / Starting MRR x 100

Use the starting customer base for all movements and exclude new customers. Keep the period and reactivation treatment consistent.

GRR

GRR % = (Starting MRR - Contraction - Churn) / Starting MRR x 100

GRR excludes expansion and new customer revenue. It measures revenue retained, not the percentage of customers retained.

Side-by-side comparison

Criteria	NRR	GRR
Includes expansion	Yes	No
Can exceed 100%	Yes	No (caps at 100%)
90th percentile (SaaS Capital, 2026)	117.9%	100%
Median (same 2026 survey segment)	103%	91%
Best for	Investor reporting, growth efficiency	Product and customer health
Hides	The size of the churn problem	The upside from expansion
Pairs with	ARR growth, LTV calculation	Cohort retention curves, customer health scores
Sensitivity	High. A few large expansions move it	Can move sharply when a large account cancels or downgrades

When to use each

Choose NRR when

You're telling investors the growth efficiency story
You have an upsell or expansion motion that's working
You're modeling out-year revenue with the existing base
Comparing yourself to public SaaS benchmarks (most use NRR)
You want a single number for board reporting

Choose GRR when

You need to know if customers actually stick around
You're sizing customer success or product investment
You're benchmarking churn against industry medians
You're looking for early signs of trouble that NRR hides
You want to compare segments (SMB GRR versus enterprise GRR)

Pros and cons

NRR

Pros

Summarizes revenue retained from existing customers
Captures both retention and expansion in one number
Above 100% is a clear, simple story for investors

Cons

Hides churn when expansion is large
Sensitive to a few big expansions in any given period
Doesn't tell you why the number moved

GRR

Pros

Honest about churn. No expansion masking
Pairs cleanly with cohort retention curves
Shows losses that a net retention figure can obscure

Cons

Doesn't capture the upside of an upsell-led model
Less useful as a single metric for the board
Cannot show growth from expansion, even when that growth is substantial

Try the related tools

Use your own inputs to explore the calculations and compare results.

MRR/ARR Calculator Churn Rate Calculator

Frequently asked questions

What is the difference in one line?

NRR includes expansion revenue. GRR does not. NRR can exceed 100%; GRR cannot.

Which one matters more?

Use both. NRR shows whether revenue from existing customers grew or shrank. GRR shows the losses before expansion offsets them.

What is a good NRR for SaaS?

SaaS Capital's 2026 survey of bootstrapped B2B SaaS companies with $3M-$20M ARR reports median annual NRR of 103% and GRR of 91%. The 90th percentiles are 117.9% and 100%. Compare with that segment only if the business and measurement period fit.

Can NRR be 130% if GRR is 85%?

Yes. A 15% gross revenue loss plus expansion equal to 45% of starting revenue produces 130% NRR. Gross losses can include downgrades as well as cancellations, so this does not mean 15% of customers left.

How does NRR connect to LTV?

Expansion and revenue losses help forecast cohort value. The simple subscription LTV formula uses customer churn with stable revenue and margin assumptions. Do not replace that denominator with zero or negative net revenue churn. Use a cohort cash-flow model when expansion materially changes value over time.

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