Net revenue retention, or NRR, measures how much revenue a company keeps and grows from its existing customers over a period, including expansions and downgrades, excluding any revenue from new customers acquired in that time.
An NRR above 100% means existing customers are spending more on average than they were a year ago, even after accounting for churn and downgrades, so the business can grow purely from its existing base before counting a single new customer. An NRR below 100% means the existing base is shrinking in dollar terms even if new sales are covering the gap.
Investors treat high NRR as one of the strongest signals a business model actually works, since it says something about durable value delivered to existing customers rather than just an ability to keep signing new ones. A company growing quickly on new-customer sales alone, with weak NRR underneath it, is often a less resilient business than the top-line growth number suggests.
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