One period of MRR movements gives you both retention rates: net with expansion counted, gross without. The gap between them is your expansion story.
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Both rates start from the MRR you had at the beginning of the period, from customers you already had. Net revenue retention adds the expansion and reactivation those customers brought, subtracts contraction and churn, and divides by where you started. Gross revenue retention subtracts the same losses but gives no credit for expansion, which is why it can never exceed 100%.
New business is excluded from both, and that exclusion is the entire point. Retention asks what happened to the revenue you already had. Let new logos into the numerator and you have computed a growth rate wearing a retention label.
The two numbers only mean something together. A company at 94% GRR and 98% NRR keeps most of its revenue and expands a little. A company at 84% GRR and 118% NRR loses far more but sells hard into the accounts that stay. Both stories are viable, and they call for completely different work.
A wide gap means expansion is carrying the business, which is durable only as long as the accounts keep growing. A narrow gap with a high GRR means the base is genuinely sticky and expansion is the opportunity you have not taken yet.
It depends heavily on segment. Enterprise books, where seats and usage grow inside accounts, commonly run well above 100%. Self-serve books more often sit below it. Above 100% is the line that matters, because that is where revenue compounds without new acquisition.
The convention is annual, comparing a cohort against itself twelve months earlier. A monthly figure is useful for spotting a trend early, but never compare a monthly NRR to a benchmark quoted annually. They are different measurements.
They are the same measurement with the sign flipped. NRR of 98% is net MRR churn of 2%. A company reporting negative net churn is reporting NRR above 100%.
Because including it would break the metric. Both rates measure what happened to revenue you already had, so revenue from customers acquired during the period has no place in either.
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