Calculate NRR and GRR from expansion, contraction, and churned MRR — the single most predictive metric of SaaS company quality and future growth.
| Segment | Good NRR | Great NRR | Best-in-Class |
|---|---|---|---|
| SMB SaaS | 100% | 105-110% | 115%+ |
| Mid-Market SaaS | 110% | 115-120% | 125%+ |
| Enterprise SaaS | 115% | 120-130% | 130%+ |
| Snowflake (IPO, 2020) | 158% NRR — The benchmark for data platform SaaS | ||
| Twilio (2018-2021) | 130-155% NRR — Usage-based model drives expansion | ||
NRR and GRR measure different aspects of retention and serve different audiences.
(Beg MRR + Expansion – Contraction – Churn) / Beg MRR
Can exceed 100%. Measures expansion power. Primary metric for investors evaluating growth potential from existing base.
(Beg MRR – Contraction – Churn) / Beg MRR (capped at 100%)
Cannot exceed 100%. Measures revenue floor. Primary metric for evaluating churn health in isolation.
NRR above 100% means existing customers compound your revenue automatically. At 120% NRR:
This is why top enterprise SaaS companies can achieve ‘land and expand’ models where they sell cheaply into an account, then expand over 3-5 years into the full organization.
100% NRR means you are retaining all revenue (no expansion, no contraction). 110%+ is good for mid-market. 120%+ is great and signals strong expansion revenue. Above 130% is best-in-class and commands premium valuation multiples. Snowflake's 168% NRR at IPO set the public benchmark. Below 100% means churn is eroding your revenue base faster than you add new customers.
NRR = (Beginning MRR + Expansion MRR − Contraction MRR − Churned MRR) / Beginning MRR × 100. This gives you a percentage. If NRR = 115%, your existing customer cohort is generating 15% more revenue than it did at the start of the period — without acquiring a single new customer.
Red flags: (1) NRR trending down quarter over quarter even if above 100%. (2) GRR diverging significantly from NRR — may mean you are masking high churn with heavy upselling. (3) Expansion MRR concentrated in one or two large accounts (upgrade risk). (4) Contraction MRR growing as a % of beginning MRR — often precedes a churn wave 2-3 quarters out.
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