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SaaS Metrics Library
Gross and Net Revenue Retention: Calculation, Benchmarks & Improvement Guide
Understand gross and net revenue retention, calculate them with your own numbers, see how they benchmark against other SaaS companies, and get practical tips to improve them. ScaleXP calculates gross and net revenue retention and 30+ other SaaS metrics straight from your accounting and CRM data, prepared daily.
This article will provide
- Calculation
- Benchmarks
- Improvement
Revenue retention measures the share of revenue a company keeps from its existing customers over a period.
Two versions are used. Gross revenue retention counts only what you lose, so it can never exceed 100%. Net revenue retention adds expansion, so it can.
The pair is more useful than either alone, because the distance between them tells you something neither number does.
The formulas: GRR = (starting recurring revenue − churn − downgrades) ÷ starting recurring revenue, and NRR = (starting recurring revenue − churn − downgrades + expansion) ÷ starting recurring revenue.
How is Gross Revenue Retention calculated?
Gross Revenue Retention is calculated by taking the recurring revenue you started the period with, subtracting churn and downgrades, and dividing the result by that starting revenue. Expansion is excluded, so GRR can never exceed 100%. The formula is:
Net Revenue Retention or Net Dollar Retention is calculated as:
The formulas above are calculated annually. Most companies also track them monthly and quarterly.
To convert a monthly figure to an annual rate, raise it to the power of twelve. For a quarterly figure, use the power of four.
Worked example
| Line | Amount |
|---|---|
| Recurring revenue at the start of the year | $1,000,000 |
| Churn | −$60,000 |
| Downgrades | −$20,000 |
| Expansion | +$130,000 |
| GRR = ($1,000,000 − $60,000 − $20,000) ÷ $1,000,000 | 92% |
| NRR = ($1,000,000 − $60,000 − $20,000 + $130,000) ÷ $1,000,000 | 105% |
Try it with your numbers
$
$
Revenue kept against revenue you started with: $840,000 of $1,000,000 Exclude expansion — that belongs in net retention.
84% gross revenue retention
Keep reading to see how that compares with the industry benchmark.
How your result compares
Your result
84% gross revenue retention
That puts you right at the 2026 median of 84%. The top quartile reaches 91% or higher.
Change your numbersOne number against one benchmark only tells you so much. The 2026 benchmark report has the median and top-quartile figures for all 20 metrics, so you can see where the rest of the business sits.
Get the 2026 SaaS benchmark report
Definitions, formulas, and this year’s median and top-quartile numbers for all 20 metrics in the library. One PDF you can take straight into your next board meeting.
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Your report is ready.
Download the 2026 SaaS Benchmark Report We’ve emailed you a copy as well.How does GRR differ from NRR?
The only formula difference is that net revenue retention includes expansion — upsells, cross-sells and price rises to existing customers.
That single change is why GRR is capped at 100% and NRR is not.
They answer different questions. GRR asks how much you are keeping. NRR asks whether the customer base is growing overall. A board pack showing only NRR is showing you the flattering half.
| Gross revenue retention (GRR) | Net revenue retention (NRR) | |
|---|---|---|
| Counts | Churn and downgrades only | Churn, downgrades and expansion |
| Ignores | All expansion revenue | Nothing from the existing base |
| Ceiling | Cannot exceed 100% | Can exceed 100% |
| Answers | How much are we keeping? | Is the existing base growing? |
| 2026 median | 84% | 102% |
Worked example
Start the year with $1,000,000 of ARR from existing customers. Over the year you lose $160,000 to churn and downgrades, and the customers who stayed add $180,000 of expansion.
Gross revenue retention is ($1,000,000 − $160,000) ÷ $1,000,000 = 84%.
Net revenue retention is ($1,000,000 − $160,000 + $180,000) ÷ $1,000,000 = 102%.
Same customers, same year, eighteen points apart. The difference is entirely expansion.
Gross revenue retention is ($1,000,000 − $160,000) ÷ $1,000,000 = 84%.
Net revenue retention is ($1,000,000 − $160,000 + $180,000) ÷ $1,000,000 = 102%.
Same customers, same year, eighteen points apart. The difference is entirely expansion.
Net revenue retention is also reported as net dollar retention; the two names describe the same calculation. See net dollar retention for how it is used in valuation, and revenue churn for the losses that sit underneath both figures.
What are good results for Gross Revenue Retention and Net Revenue Retention?
Both vary widely by business model and customer size, so context matters more than the headline number.
The benchmarks below break them down by go-to-market motion, contract value and growth rate, which is where the useful comparisons sit.
How is Gross Revenue Retention used by SaaS companies?
SaaS (Software as a Service) companies use Gross Revenue Retention as a key metric to assess the stickiness of the product. A high Gross Revenue Retention rate indicates that a significant portion of the company’s revenue is retained, which is positive.
Why Gross Revenue Retention Matters for SaaS
Gross Revenue Retention (GRR) and its link to churn directly impact the financial health of a SaaS company. GRR measures the percentage of recurring revenue retained from existing customers before any upsells or expansions. A declining GRR signals customer churn – customers canceling their subscriptions or downgrading to lower-priced plans. Churn is the silent killer of SaaS businesses; it erodes the foundation of your revenue stream. A strong GRR, on the other hand, indicates a healthy customer base with high levels of satisfaction and loyalty. This not only stabilizes revenue but creates a solid platform for future growth.
What are the GRR and NRR benchmarks?
Benchmarks only help when they match your shape of business. A product-led company selling $3K contracts should not measure itself against enterprise sales-led retention.
The current figures, from a survey of 342 B2B SaaS companies, are below.
84%
Median GRR
102%
Median NRR
91%+
GRR top quartile
−4pts
GRR fell from 88%
The number that matters
The gap between NRR and GRR is 18 points. That is how much work expansion is doing to cover churn.
Read them together and the story changes: NRR at 102% looks healthy, but GRR fell from 88% to 84%. Underlying retention got worse while expansion revenue hid it.
Read them together and the story changes: NRR at 102% looks healthy, but GRR fell from 88% to 84%. Underlying retention got worse while expansion revenue hid it.
Gross revenue retention by go-to-market motion
| Motion | Median GRR |
|---|---|
| Sales-led | 88% |
| Hybrid | 80% |
| Product-led | 79% |
Nine points separate sales-led from product-led. Self-serve customers leave more easily.
And by contract value
| Cohort | Median GRR |
|---|---|
| Enterprise ($50K–$100K ACV) | 91% |
| Sub-$5K ACV | 80% |
| Growing 11–20% | 89% |
| Growing under 10% | 79% |
Retention and growth move together: the slowest-growing cohort also retains worst, ten points below companies growing 11–20%. Source: 2026 Aleph × Benchmarkit SaaS & AI Performance Benchmarks, full-year 2025 actuals from 342 companies (226 reported GRR).
Show both sides of retention
Put GRR and NRR side by side.
NRR can look strong while churn quietly damages the customer base. ScaleXP calculates gross and net retention from the same underlying movements, so expansion never obscures what was lost.
Compare retained revenue, expansion and the gap between GRR and NRR using one opening cohort.
Automate Your SaaS MetricsExample connected retention comparison
- Starting MRR: $100,000
- Customer movements: −$8,000 loss, +$13,000 expansion
Gross revenue retention
92%
Revenue retained after churn and downgrades, before any expansion is counted.
Illustrative example figures, not your live data.
Track both, not just one
Reporting NRR alone hides the churn underneath it. ScaleXP calculates gross and net retention side by side from your billing data, by cohort and by segment, every month.
See renewal management →
ScaleXP fully automates Net Dollar Retention. Through a series of smart algorithms, the system will classify your revenue into New, Lost, Upsells, and Downgrades. These algorithms make it easy to fully automate both revenue recognition and critical SaaS metrics.
What drives the gap between GRR and NRR
The distance between the two numbers is expansion revenue.
Gross retention counts only losses: churn and downgrades. Net retention adds what existing customers spend on top.
A wide gap means expansion is masking churn. A narrow one means growth has to come from new customers instead.
At the current medians the gap is eighteen points, which is wide. Expansion is carrying a lot of weight across the market.
Where the retention levers actually sit
Because NRR spans the whole customer journey, its levers sit across the business rather than in one team.
Onboarding and time-to-value drive early retention. Product depth and adoption drive expansion later.
Pricing structure matters too: seat-based and usage-based models expand differently as a customer grows, which is why two companies with identical churn can post very different NRR.
Gross and Net Revenue Retention Visualization Example
This graph shows net revenue retention as a single month, a six-month average and a twelve-month average.
Single-month figures are volatile. One large renewal or loss moves them sharply, which is why boards usually look at the rolling averages instead.
The twelve-month line is the one to compare against benchmarks. The monthly line is the one that tells you something has changed.
How ScaleXP calculates gross and net revenue retention
ScaleXP calculates gross and net revenue retention from the same underlying customer movements. Recurring revenue is linked to the contracts and customers that generated it in Xero, QuickBooks or Zoho Books, and each change is classified as new, lost, upsell or downgrade, so expansion never hides preventable churn. The calculation runs as each month closes and the history is kept, so finance can show how retention moved rather than a single headline figure.
Frequently asked questions
Is 100% net revenue retention good for a B2B SaaS company?
Net revenue retention (NRR) of 100% means the existing customer base is holding its value, and it sits just below the 2026 B2B SaaS median of 102%. NRR should always be read alongside gross revenue retention (GRR), where the median is 84%, down from 88%, and the top quartile reaches 91%. The typical company relies on expansion to cover an 18-point gap, so 100% NRR with weak GRR signals churn hiding behind upsells. ScaleXP calculates GRR and NRR together automatically, so finance teams and boards see both halves of retention.
Can ScaleXP calculate GRR and NRR automatically from Xero and Salesforce?
Yes, ScaleXP calculates gross revenue retention (GRR) and net revenue retention (NRR) automatically from invoices in Xero, QuickBooks or Zoho Books and customer data in HubSpot, Salesforce or Pipedrive. Every revenue movement is classified as new, lost, upsell or downgrade, so both metrics come from one consistent dataset. ScaleXP prepares GRR and NRR daily alongside 30+ other SaaS metrics. Finance teams track both numbers together instead of relying on NRR alone, which can hide preventable churn.
How does ScaleXP keep gross revenue retention consistent with the financial statements?
ScaleXP keeps gross revenue retention (GRR) and net revenue retention (NRR) consistent with the financial statements because every churn, downgrade and expansion movement is derived from invoices and journals in Xero or QuickBooks. Both metrics start from the same recurring revenue base the ledger reports, so the retention story matches the P&L. Finance controls how upgrades, downgrades and reactivations are classified. Boards and investors get retention figures that reconcile to the management accounts every month.
How does ScaleXP show GRR and NRR side by side in board packs?
ScaleXP shows GRR and NRR side by side in live dashboards and PowerPoint board packs, so directors see how much revenue the business keeps and whether the existing base is growing. Both metrics break down by cohort and customer segment, and presentation mode lets the board drill down to the customers driving expansion or churn. Seeing gross and net revenue retention together stops expansion from masking churn. Finance teams present retention the way investors want to see it, without rebuilding the analysis in spreadsheets each month.
For Xero, QuickBooks and Zoho Books
Show the board both halves of retention.
ScaleXP keeps GRR, NRR and the movements between them current. See how much revenue customers retained, how much they added and whether expansion is masking preventable churn.
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One customer base, two essential retention views
ScaleXP links recurring revenue to the customers and contracts that generated it.
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