SaaS Metrics Deep Dive: NRR, Expansion MRR & Churn
Written by Harry Prabandham
Curated by Rubric Financial
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Net Revenue Retention (NRR)
- NRR measures the revenue retained from existing customers over a period, including expansion and contraction, calculated as (Starting MRR + Expansion - Contraction - Churn) / Starting MRR
- NRR above 100% means existing customers are growing faster than they're churning, enabling revenue growth even with zero new customer acquisition. The gold standard for SaaS is 120%+ NRR.
- Investors weigh NRR heavily because it reflects product stickiness, pricing power, and the quality of your customer base simultaneously
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About the author
Harry PrabandhamFounder & CEO
Founder and CEO of StartupCFO. MBA from Wharton, MS in Computer Science, and decades of experience building and advising venture-backed startups.
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GlossaryARR (Annual Recurring Revenue)
Annualized value of your subscription revenue at a point in time.
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