NRR vs GRR
NRR and GRR both measure how well a SaaS business holds onto revenue from existing customers, but they answer different questions. One includes expansion revenue, the other does not. Reading only one of them is how boards get blindsided by a churn problem hiding behind strong upsells.
NRR
NRR stands for Net Revenue Retention. It measures how much revenue you keep and grow from your existing customers over a period, including expansion from upsells, upgrades, and add-ons. Because expansion is added back in, NRR can exceed 100 percent — a healthy SaaS business often lands between 110 and 130 percent.
GRR
GRR stands for Gross Revenue Retention. It measures only what revenue you kept from existing customers, stripping out all expansion. It counts churn and downgrades only. GRR can never exceed 100 percent, because the best you can do is lose nothing.
NRR vs GRR: side by side
| Dimension | NRR | GRR |
|---|---|---|
| What it counts | Starting revenue minus churn and downgrades, plus expansion revenue from upsells and add-ons. | Starting revenue minus churn and downgrades only. Expansion is excluded. |
| Can it exceed 100 percent? | Yes. Strong expansion can push NRR well above 100 percent. | No. The ceiling is 100 percent because expansion is stripped out. |
| What it tells you | Whether your existing customer base is growing in dollar terms. | How sticky your product really is, independent of upsell performance. |
| Healthy benchmark | Best-in-class SaaS: 110 to 130 percent or higher. | Best-in-class SaaS: 90 percent or higher. |
| Where it hides problems | Strong upsells can mask real churn underneath. | Shows the raw churn picture with nowhere to hide. |
Which one, when?
NRR: Use NRR when you want the full picture of revenue growth inside your existing customer base. It is the headline retention number for investor updates, board decks, and SaaS valuation conversations.
GRR: Use GRR when you want to know how sticky the product actually is. It is the honest read on churn and downgrades, and it is what boards look at alongside NRR to see whether expansion is covering up a retention problem.
Frequently asked questions
Can you show a worked example?
Start with $1,000,000 in existing customer revenue at the beginning of the period. During the period, $50,000 is lost to churn and downgrades, and $80,000 is gained from upsells and expansions. GRR = ($1,000,000 − $50,000) / $1,000,000 = 95 percent. NRR = ($1,000,000 − $50,000 + $80,000) / $1,000,000 = 103 percent. Same starting base, same churn — the only difference is whether the $80,000 in expansion is added back in.
Can NRR really exceed 100 percent?
Yes. NRR includes expansion revenue from upsells, upgrades, and add-ons. If your existing customers spend more this period than last period, even after accounting for churn and downgrades, NRR goes above 100 percent. Best-in-class SaaS companies often report NRR between 110 and 130 percent.
Why does GRR max out at 100 percent?
GRR strips out all expansion revenue and only counts what you kept from the starting revenue base. The best possible outcome is losing nothing, which is 100 percent. Any churn or downgrade brings it down from there.
Why do investors look at both?
NRR alone can hide a real problem. A company can report 115 percent NRR while GRR sits at 80 percent, meaning heavy upsells are covering up serious churn. Investors and boards compare the two to see whether the customer base is actually sticky or whether growth depends entirely on squeezing more out of a shrinking group.
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