Sales Forecasting

Net Retention (NRR)

2026-05-31 8 min read

Net Retention (NRR, also Net Dollar Retention) measures the percentage of recurring revenue retained from existing customers including expansion. Formula: (Starting MRR + Expansion MRR − Churned MRR − Contraction MRR) / Starting MRR. NRR above 100% means existing customers expand faster than they churn — a fundamental signal of product strength. Best-in-class B2B SaaS: ≥120%. The metric is the single most-asked question in SaaS investor diligence.

TL;DR

<strong>Net Retention</strong> (NRR, also Net Dollar Retention) measures the percentage of recurring revenue retained from existing customers including expansion. Formula: (Starting MRR + Expansion MRR − Churned MRR − Contraction MRR) / Starting MRR. NRR above 100% means existing customers expand faster than they churn — a fundamental signal of product strength. Best-in-class B2B SaaS: ≥120%. The metric is the single most-asked question in SaaS investor diligence.

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Sources

Definitions and benchmarks reference primary sources from the Sales Forecasting pillar. Verified at publication.

  1. 1 State of Sales Forecasting — Gartner, 2025. View source .
  2. 2 AI Revenue Forecasting Accuracy Study — Forrester, 2025. View source .
  3. 3 Pipeline Coverage Benchmarks B2B SaaS — Pavilion, 2025. View source .

Fairview cites primary sources only — government data, academic research, industry benchmarks from named publishers, and official vendor documentation. See our editorial standards.