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← Statistics glossary

gross revenue retention (GRR)

Also called: GRR, gross dollar retention

Share of recurring revenue from the customers you had at the start of a period that you still have at the end, ignoring upgrades; never above 100%.

GRR answers one question: of the recurring revenue your existing customers paid at the start of a period, how much is still there, if you ignore every upgrade?

GRR=start MRR−contraction−churned MRRstart MRR\text{GRR} = \frac{\text{start MRR} - \text{contraction} - \text{churned MRR}}{\text{start MRR}}

Contraction is revenue lost to downgrades from customers who stay; churned MRR is revenue of customers who cancelled. New customers are not in the formula at all, and neither is expansion, so GRR can never exceed 100%. It is the purest measure of how well the product holds on to the revenue it already has.

GRR and net revenue retention (NRR) use the same base. The gap between them is expansion: NRR − GRR = expansion ÷ start MRR. A business with 95% GRR and 101% NRR loses 5% of its revenue each month and wins back 6% through upgrades.

Converting a monthly GRR to a year compounds it: 95% a month is 0.9512=54%0.95^{12} = 54\% a year, which is why a few points of monthly revenue loss matter so much.

Example

A month starts with $40,000 MRR. Customers who stay downgrade by $600, cancellations take $1,400, upgrades add $2,400.

GRR =(40,000−600−1,400)/40,000=95.0%= (40{,}000 - 600 - 1{,}400) / 40{,}000 = 95.0\%. The upgrades don't change it; they show up in NRR (101.0%).

Common mistakes

  • Adding upgrades. Then it is NRR, not GRR.
  • Including new customers. Only customers paying at the start count.
  • Annualising by multiplying. 5% lost a month is 46% lost a year by compounding, not 60%.