How to build a net revenue retention report
An NRR report is the clearest read on whether your existing base compounds. Because NRR above 100 percent means revenue grows without new sales, it is the metric investors and operators watch most closely.
The essential companion is gross revenue retention. Reporting NRR alone can hide a leaky base that a few big expansions are covering, so a good report always shows both.
- By cohort Fixed groups over time
- NRR + GRR Show both together
- Over 100% The compounding line
Short answer
Build a net revenue retention report by fixing a cohort of existing customers, then tracking their starting revenue plus expansion minus contraction and churn over time, divided by starting revenue. Show NRR beside gross revenue retention by segment and cohort, so you can see whether expansion is genuinely durable or masking underlying churn.
Step by step
Fix a cohort and starting revenue
Take the customers you had at the start of a period and their starting recurring revenue. Exclude anyone acquired during the period so the report measures the existing base.
Track expansion, contraction, churn
For that cohort, sum expansion, contraction, and churn over the period. These movements are what drive retention up or down.
Compute NRR and GRR
NRR equals (starting plus expansion minus contraction minus churn) divided by starting. GRR excludes expansion. Show both, by segment and cohort.
Trend and compare cohorts
Plot NRR over time and across cohorts. Rising NRR in newer cohorts means the base is getting healthier; a widening NRR-to-GRR gap warns that expansion is masking churn.
Common mistakes
Including new customers in the cohort, which inflates NRR and defeats the purpose. NRR measures the existing base only; new logos belong in the new-ARR line, not retention.
Reporting NRR without GRR. A 120 percent NRR can hide 80 percent GRR when a few expansions cover widespread churn. Always show the gross floor beside the net headline.
How Ardovo handles it
Ardovo computes NRR and GRR by cohort from live billing, keeping new logos out automatically. Rook flags a widening gap between them and points to the churning segment expansion is masking, so you fix retention before it catches up with you.
Frequently asked questions
How do you build an NRR report?
Fix a cohort of existing customers, track their starting revenue plus expansion minus contraction and churn, and divide by starting revenue. Show NRR beside gross revenue retention by cohort and segment, trended over time.
Why show GRR alongside NRR?
Because NRR can look strong while gross retention is weak, when a few large expansions mask widespread churn. Showing both reveals whether growth is broad-based retention or a handful of accounts carrying the number.
Should new customers be in an NRR report?
No. NRR measures the existing base only, so new customers acquired during the period are excluded. Including them inflates the metric and defeats its purpose of isolating retention and expansion.