Gross Revenue Retention vs Net Revenue Retention: Key Differences

~1 min read

GRR and NRR are often confused, but they answer different questions. Understanding both helps you diagnose whether a retention problem is a churn problem, an expansion problem, or both.

The formulas

GRR = (Starting MRR − Contraction − Churn) ÷ Starting MRR × 100 NRR = (Starting MRR + Expansion − Contraction − Churn) ÷ Starting MRR × 100

The only difference: NRR includes expansion MRR. GRR never exceeds 100%.

What each metric tells you

GRR is a pure retention metric. It measures your ability to keep existing revenue without any upselling. A company with 95% GRR retains 95 cents of every dollar from existing customers before any expansion.

NRR includes expansion, so it can exceed 100%. A company with 95% GRR and 25% expansion contribution has NRR = 120%. The expansion is offsetting churn and then some.

When each matters in practice

  • Investor due diligence: NRR is the headline metric. Investors want to see the combined retention + expansion effect.
  • CS team effectiveness: GRR is more actionable. Your CS team controls churn directly but only partially controls expansion.
  • Product-market fit signal: GRR below 85% in SMB or 90% in enterprise is a red flag that requires product or positioning work before scaling GTM.

Use the NRR Calculator to see both metrics side-by-side for your own MRR data.

Calculate it yourself — free

Use our free Net Revenue Retention (NRR) Calculator to run the numbers for your own business.

Open NRR Calculator →