NRR vs GRR — Complete Guide for SaaS

Net Revenue Retention (NRR) and Gross Revenue Retention (GRR) are the two most important metrics in SaaS. Understanding the difference between them and knowing which to optimize is critical for sustainable growth.

What is Gross Revenue Retention (GRR)?

GRR measures the percentage of recurring revenue retained from existing customers, excluding any expansion revenue. GRR can never exceed 100%. A GRR of 85% means you retained 85% of your existing revenue, losing 15% to churn and downgrades.

What is Net Revenue Retention (NRR)?

NRR measures the percentage of recurring revenue retained from existing customers, including expansion revenue from upsells and cross-sells. NRR can exceed 100%.

Why NRR is the Most Important SaaS Metric

A SaaS company with 120% NRR grows its existing revenue base by 20% per year without acquiring a single new customer.

What is a Good NRR for SaaS?

Above 120% is exceptional. Between 100-120% is healthy. Between 85-100% needs improvement. Below 85% is critical and requires immediate CS intervention.