How the net revenue retention calculator works
Net revenue retention measures how recurring revenue changes within an existing customer cohort. It combines losses from churn and contraction with gains from expansion. New-customer revenue is deliberately excluded, because acquisition can hide a retention problem rather than resolve it.
Gross revenue retention uses the same starting cohort but excludes expansion. Comparing the two helps distinguish stability from growth. An NRR above 100% can occur when expansion more than offsets losses, while GRR cannot exceed 100% under this definition.
NRR = (starting revenue − churn − contraction + expansion) ÷ starting revenue × 100; GRR excludes expansion
Worked example
Start with the example inputs below. The calculator opens with these values; reset the example at any time to compare your own scenario. Monetary examples use GBP, and all amounts must use the same currency.
| Measure | Value |
|---|---|
| Starting cohort recurring revenue | 100000 |
| Recurring revenue lost to churn | 5000 |
| Recurring revenue contraction | 3000 |
| Recurring revenue expansion | 12000 |
| Measure | Value |
|---|---|
| Net revenue retention | 104% |
| Gross revenue retention | 92% |
| Ending cohort recurring revenue | £104,000.00 |
Only the starting customer cohort is included. New-customer revenue must not be entered as expansion.
How to use the result
Choose a cohort at the start of the measurement period and follow only its recurring revenue. Use either monthly recurring revenue or annual recurring revenue throughout. For a year-long retention report, compare the opening and closing recurring run rates of that cohort rather than mixing annual receipts with monthly subscriptions.
Inspect churn and contraction separately. A lost account may need a different response from an account that reduced seats. Then examine where expansion comes from: an average can look healthy while many smaller customers are struggling to retain value.
Assumptions and common mistakes
Revenue categories must be mutually exclusive. Do not count the same lost subscription in both churn and contraction. Currency movements and changes in recurring revenue definitions can affect the comparison, so use a consistent reporting basis. New logos must never be entered as expansion. Reconcile the ending cohort total against your subscription records before using the percentage in a board report.