What it is
Net Revenue Retention (NRR), also known as Net Dollar Retention (NDR), is a key metric, especially for subscription-based businesses, that measures the percentage of recurring revenue retained from an existing cohort of customers over a specified period. It accounts for revenue from upsells, cross-sells, and expansions, offset by downgrades and churn (customer cancellations). An NRR above 100% indicates that a company is growing revenue from existing customers faster than it's losing it.
Investors closely watch NRR as it's a strong indicator of a company's product stickiness, customer satisfaction, and long-term growth potential without relying solely on acquiring new customers. A consistently high NRR signals efficient growth and strong competitive moats. Companies with high NRR are often valued more highly because they demonstrate sustainable, predictable revenue streams. News and earnings reports frequently highlight NRR to showcase a company's ability to expand within its current customer base.
Why it matters
High NRR shows a company is effectively growing revenue from its existing customers, signaling strong product value, customer loyalty, and sustainable growth. This impacts valuation.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice