Would the business grow even if it won no new customers?
The revenue this year from last year's customers, including upgrades, price rises, downgrades and cancellations. Above 100% means the existing customer base grows on its own.
Get a finance review(Starting recurring revenue + Expansion − Contraction − Churn) ÷ Starting recurring revenue × 100
100% or more is healthy for small and mid-market SaaS and managed services; 110% or more is strong. Below 90% usually signals a retention problem.
Recurring revenue at the end of a period from customers who were already customers at the start, divided by the recurring revenue from those same customers at the start. New customers are excluded. It is usually measured over twelve months.
Net revenue retention shows the health of the existing customer base in a single figure. When it is above 100%, growth from existing customers more than offsets those who leave or spend less, and every new customer adds to a base that is already growing. When it is below 100%, the business has to win new customers just to stand still. It is one of the metrics buyers of recurring revenue businesses value most.
Use recurring revenue only, excluding one-off projects and set-up fees. Track gross revenue retention alongside it, which ignores upgrades, so strong upselling does not hide high churn. Look at retention by customer cohort and size, as small customers often behave very differently from large ones.
Most owner-managed businesses don't, or they work it out in a way that flatters the result. We'll calculate it from your own numbers and show you what it's telling you.
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