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%. An NRR above 100% means your existing customers are generating more revenue than you are losing to churn.

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. Top SaaS companies like Snowflake, Datadog, and HubSpot have historically maintained NRR above 120%.

What is a Good NRR for SaaS?

Above 120% is exceptional with world-class CS and strong expansion motion. Between 100-120% is healthy with good retention and room to grow. Between 85-100% needs improvement as churn is offsetting growth. Below 85% is critical and requires immediate CS intervention.

How to Improve NRR

Improving NRR requires both reducing churn and increasing expansion revenue. This means proactive health monitoring, structured expansion playbooks, regular EBRs, and dedicated CSMs with enough bandwidth to execute. At Million Square Solutions, we focus on helping SaaS companies reach and sustain 100%+ NRR through dedicated CS teams and AI-powered retention systems.