Gross vs Net Revenue Retention Explained for SaaS
Gross Revenue Retention (GRR) and Net Revenue Retention (NRR) measure customer retention health from two distinct angles. While NRR highlights total expansion growth, GRR isolates revenue loss to measure product stickiness.
Relying solely on NRR can mask underlying account churn if aggressive expansion from a few enterprise accounts hides steady small-business cancellations.
The Gross Revenue Retention Formula
Gross Revenue Retention calculates retained recurring revenue from an existing cohort excluding expansion upgrades entirely:
Because GRR excludes expansion revenue, its theoretical maximum value is 100%. If Starting MRR is $100,000, Contraction is $3,000, and Churn is $2,000: ($95,000 / $100,000) x 100 = 95.00% GRR.
Key Differences Between GRR and NRR
- Includes Expansion: NRR includes expansion upgrades; GRR strictly excludes expansion.
- Upper Bound Limit: GRR cannot exceed 100%; NRR frequently exceeds 100% (net negative churn).
- Core Metric Focus: GRR evaluates product satisfaction; NRR evaluates account growth potential.
Run both calculations instantly using our interactive NRR Calculator.
