NRR reflects your ability to retain and expand customers. NRR calculates total revenue (including expansion) minus revenue churn (contract expirations, cancelations, or downgrades).
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 NRR for January is 111% ($30,000 ÷ $27,000).