NRR vs GRR: What's the Difference?
Learn how Net Revenue Retention and Gross Revenue Retention differ, and why both are essential metrics for measuring SaaS growth efficiency.
Key Takeaways
- GRR measures revenue retention excluding expansion, and is capped at one hundred percent.
- NRR includes expansion revenue and can exceed one hundred percent, indicating net growth from existing customers.
- Top-performing SaaS companies target NRR above one hundred and twenty percent.
What is NRR?
Net Revenue Retention (NRR) measures the percentage of recurring revenue retained from existing customers over a period, including expansion, upsells, and cross-sells. An NRR of one hundred and fifteen percent means your existing customer base grew by fifteen percent without any new customer acquisitions. NRR above one hundred percent indicates that growth from existing accounts outweighs losses from churn and downgrades. High NRR is a strong indicator of product stickiness and effective land-and-expand strategies.
What is GRR?
Gross Revenue Retention (GRR) measures the percentage of recurring revenue retained from existing customers excluding any expansion revenue. GRR can never exceed one hundred percent because it only accounts for losses from cancellations, downgrades, and contractions. A GRR of ninety-two percent means you retained ninety-two percent of your starting revenue before any upsells. This metric isolates your ability to keep customers paying at their original level and reveals the raw health of your retention efforts.
Key differences
GRR isolates retention quality by excluding growth, making it a pure measure of customer satisfaction and product value. NRR includes expansion, showing the complete revenue picture from your installed base. A company with eighty-five percent GRR but one hundred and twenty percent NRR has retention challenges masked by strong upselling. Investors often look at GRR to assess floor risk and NRR to evaluate growth potential, as both metrics tell complementary stories about business health.
When to use each
Use GRR to identify retention problems that need fixing, set benchmarks for customer success teams, and assess baseline revenue stability. Use NRR for growth forecasting and demonstrating business efficiency to investors. African SaaS companies serving enterprises often achieve strong GRR above ninety percent because switching costs are high, while their NRR benefits from expanding usage as clients grow. Track both to separate retention performance from expansion performance.