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Revenue metrics

GRR (Gross Revenue Retention)

Revenue retained from an existing cohort with expansion excluded, so it can never exceed 100%. The measure of how much you keep.

Gross Revenue Retention counts contraction and churn but not expansion:

GRR = (starting MRR − contraction − churn) ÷ starting MRR

It is capped at 100% by construction, and that is the point. NRR can hide serious churn behind a handful of large expansions; GRR cannot.

A business with 125% NRR and 80% GRR is losing a fifth of its revenue base every year and covering it with upsell into the survivors. That is a real business model, but it is a different one from 110% NRR on 98% GRR, and only one of the two is safe if expansion slows.

Related terms

  • NRR (Net Revenue Retention) Revenue this period from a cohort of existing customers, divided by what that same cohort paid a year ago, including expansion, contraction and churn.
  • Churned MRR Recurring revenue lost from customers who cancelled outright in the period, whether they chose to leave or their payments stopped working.
  • Contraction MRR Recurring revenue lost from customers who stayed: downgrades, removed seats, dropped add-ons and reduced commitments.