What is Net Revenue Retention?
Net Revenue Retention is a core concept in modern B2B revenue. Here is a clear, accurate definition, why it matters, and how Ardovo handles it.
Short answer
Net revenue retention, or NRR, measures the percentage of recurring revenue retained from existing customers over a period, including expansion and after subtracting churn and downgrades. NRR above 100 percent means the existing base grew on its own, a powerful signal because the business would expand even with zero new customers.
Key takeaways
- Revenue kept from existing customers, including expansion.
- Above 100 percent means the base grows without new sales.
- Combines churn, downgrades, upsell, and cross-sell.
- A top signal of product value and durable growth.
Why it matters
NRR above 100 percent is the holy grail of subscription economics: your revenue compounds from existing customers alone. Investors prize it because it means efficient, durable growth.
How Ardovo handles it
Ardovo calculates NRR by cohort from live billing and links every expansion and contraction back to the deals that caused it. Rook surfaces expansion opportunities to push NRR above 100 percent.
Frequently asked questions
What is a good net revenue retention rate?
Best-in-class B2B SaaS often exceeds 110 to 120 percent NRR, meaning existing customers spend more each year even after churn. Above 100 percent is the threshold for expansion-driven growth.
How is NRR calculated?
Take starting recurring revenue from a cohort, add expansion, subtract contraction and churn, then divide by the starting revenue. New-customer revenue is excluded so it measures only the existing base.