GuideThe numbers leadership asks about
NRR (net revenue retention)
Definition
Revenue from the existing customer base this period against what the same customers produced a period earlier, with expansion, contraction and churn all counted. It measures whether the base you already own is growing or shrinking by itself.
How it’s calculated
Take the revenue your existing customers were paying at the start of the period. Add the expansion they have bought since: upgrades and price rises that stuck. Subtract contraction from customers who stayed but pay less, and subtract everything lost to churn. Divide the result by the starting figure. Above 100% the base grows before a single new customer arrives. Below it, part of the acquisition budget is spent standing still, and you can size that part from your own numbers: at 90%, a tenth of the base’s revenue must be replaced each period before any growth shows.
What to watch for
The churned accounts were removed before the division, so the figure describes retention among survivors and sits above the real number whenever anyone has left. The figure is blended across the whole business, and a segment quietly losing customers hides inside a segment expanding; ask for it split the way you sell and see which side carries it. Expansion is arriving entirely as price increases while seats or usage shrink, which the headline reports as growth right up to renewal.
The question you ask
“Is the denominator every customer we had at the start, including the ones who left?”