NRR vs GRR: net vs gross revenue retention
NRR and GRR are two lenses on the same customer base. One measures net movement including growth; the other measures only what you lose. Together they tell the full retention story.
Relying on NRR alone is a common trap. It can look excellent while GRR reveals a leaky bucket that a few big expansions are papering over.
Short answer
NRR (net revenue retention) includes expansion and can exceed 100 percent; GRR (gross revenue retention) excludes expansion and is capped at 100 percent. NRR shows net growth within your base; GRR shows pure stickiness. A wide gap between them means upsell is masking churn. Track both to understand retention honestly.
Key takeaways
- NRR includes expansion; GRR does not.
- NRR can exceed 100 percent; GRR caps at 100 percent.
- A wide NRR-GRR gap means expansion is masking churn.
- Investors want both to judge retention quality.
Reading the two together
Imagine NRR of 115 percent and GRR of 85 percent. The 30-point gap says expansion is impressive but underlying churn is high; you are losing 15 percent of revenue and clawing it back plus more through upsell. That works until expansion slows.
Now imagine NRR of 108 percent and GRR of 96 percent. That is healthier: modest expansion on top of very sticky retention. Same NRR band, very different quality.
How Ardovo handles it
Ardovo shows NRR and GRR side by side with the gap called out, so you never celebrate NRR while GRR erodes. Rook flags a widening gap and points to the churning segment expansion is masking.
Frequently asked questions
What is the difference between NRR and GRR?
NRR includes expansion revenue and can exceed 100 percent; GRR excludes expansion and caps at 100 percent. NRR shows net growth in your base, GRR shows how much you retain before any upsell.
Can GRR be higher than NRR?
No. GRR excludes the expansion term that NRR includes, so GRR is always less than or equal to NRR. If you ever compute GRR above NRR, there is an error in the calculation.
Which matters more, NRR or GRR?
Both. NRR reflects growth potential within the base; GRR reflects product stickiness and true churn. A great business has strong GRR and NRR comfortably above 100 percent, with a modest gap between them.