Term · Business Model & Operating KPIs
Gross Revenue Retention (GRR)
In briefGross Revenue Retention indicates what share of recurring revenue is retained without taking upsells into account; only cancellations and downgrades count. The metric caps at 100% and isolates pure churn, whereas Net Revenue Retention includes expansions.
Definition
Gross Revenue Retention measures what share of a customer cohort's recurring revenue is retained over a period, excluding upsells or expansions. Only cancellations and downgrades reduce the metric; it can therefore reach at most 100%. GRR isolates pure churn and thus complements Net Revenue Retention.
How it is calculated
Formula. GRR = (starting recurring revenue − churn − downgrades) ÷ starting recurring revenue × 100%
Why it matters for small caps
For small subscription and software models, GRR shows the underlying customer loyalty, undistorted by a few large expansions. A low GRR alongside a high NRR reveals that growth depends on individual existing customers rather than broad retention.
Common misreadings
- GRR is confused with NRR; because GRR excludes expansions, it can never exceed 100%, whereas NRR can.
In the process
Frequently asked
Why can GRR never exceed 100%?
Because only negative effects such as cancellations and downgrades are included, while no revenue expansions from existing customers are taken into account.
How does GRR differ from NRR?
NRR includes expansions and upsells and can exceed 100%, while GRR measures only the retention of the existing revenue base before expansion.
What does a low GRR signal?
It points to high churn or weak customer retention, which can be masked by expansion among a few customers.
Related terms
Education only, not investment advice. Ranges and thresholds are didactic orientation values, not an official standard.