Net Revenue Retention calculates total revenue (including expansion) minus revenue churn (contract expirations, cancelations, or downgrades).
| Net Revenue Retention = | Monthly Recurring Revenue (MRR) at Start of Month + Expansions + Upsells – Churn – Contractions |
| MRR at Start of Month |
EXAMPLE:
- Your business enters January with an MRR of $27,000 and exits January with an MRR of $35,000 (due to upsells) from the same customers at the start of the month.
- Your business exits January with $5,000 in revenue churn due to contract expirations.
- Your net revenue retention for January is 111% ($30,000 ÷ $27,000).