NRR and GRR: the retention metrics that show if your SaaS is durable
Gross vs. net revenue retention, a numeric example and why investors ask for the cohort table.
Revenue growth can hide a leaky bucket: new customers coming in while old ones leave. Retention metrics show what happens to the base you already have.
GRR: gross revenue retention
GRR = (starting revenue − churn − contraction) ÷ starting revenue. How much of a customer group's revenue you kept, ignoring upsell. It never exceeds 100%.
NRR: net revenue retention
NRR = GRR + expansion (upsell, more seats, bigger plan). It can exceed 100%: when it does, the base grows on its own, even with zero new customers.
The example
A cohort starts with $100K of MRR. Over 12 months it loses $5K to cancellations and $2K to downgrades, and gains $12K in expansion. GRR = (100 − 5 − 2) ÷ 100 = 93%. NRR = (100 − 5 − 2 + 12) ÷ 100 = 105%.
Why look by cohort
Averages lie. One cohort can collapse while the average looks stable, because newer cohorts are still early. The cohort table — rows by acquisition month, columns by customer age — shows the problem first. That's why investors ask for it in due diligence.
The cohort analysis tool simulates with early and steady churn, or takes your real data pasted from a spreadsheet, and shows customer and revenue heatmaps, NRR and payback per cohort.