Net Revenue Retention vs Gross Retention

Two retention metrics that look similar and tell different stories. NRR includes expansion. GRR does not. Best-in-class operators publish both.

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.

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 tells you whether customers stay, separate from whether they spend more.

Formula comparison

NRR

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

Best-in-class SaaS hits 130% or more. Median venture-backed B2B SaaS sits around 106% in recent ChartMogul reporting.

GRR

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

Best-in-class GRR is 90% or higher for enterprise SaaS, 80%+ for mid-market, and 70%+ for SMB.

Side-by-side comparison

CriteriaNRRGRR
Includes expansionYesNo
Can exceed 100%YesNo (caps at 100%)
Best-in-class benchmark> 130% (enterprise)> 90% (enterprise)
Median (B2B SaaS, 2024)106% across stages~80-90% by stage
Best forInvestor reporting, growth efficiencyProduct and customer health
HidesThe size of the churn problemThe upside from expansion
Pairs withARR growth, LTV calculationCohort retention curves, customer health scores
SensitivityHigh. A few large expansions move itLow. Smoother because no expansion noise

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

  • The single most cited SaaS health metric
  • 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
  • Predicts long-term LTV better than NRR

Cons

  • Doesn't capture the upside of an upsell-led model
  • Less useful as a single metric for the board
  • Below 100% always, so it can feel like bad news even when growth is healthy

Try both calculators

Score your own data with both frameworks. Compare results and pick the one that fits your team.

MRR/ARR CalculatorChurn Rate Calculator

Frequently asked questions

What's the difference between NRR and GRR in one line?

NRR includes expansion. GRR doesn't. NRR can be over 100%. GRR can't.

Which one matters more?

Both, depending on the question. NRR for growth efficiency and investor reporting. GRR for product and retention health. Best-in-class operators publish both side by side.

What's a good NRR for a SaaS company?

Above 100% is healthy. Above 110% is strong. Above 130% is world-class. Below 100% means the existing base shrank, which is a sign your acquisition is offsetting churn but not creating compounding growth.

Can my NRR be 130% if my GRR is only 85%?

Yes, and it's a common pattern in expansion-heavy businesses. A 15% gross loss is offset by 45% expansion. The NRR looks great. The GRR tells you customers leave faster than the NRR alone reveals. Both numbers are real.

How does NRR connect to LTV?

The simple LTV formula uses gross churn. A more accurate LTV uses net retention. If NRR is above 100%, the right LTV calculation produces a much larger number than gross-churn-based LTV. That's why expansion-heavy SaaS commands higher valuations per dollar of MRR.

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