All terms
Finance
GRR (Gross Revenue Retention)
The percentage of recurring revenue retained from existing customers over a period, excluding upgrades. Captures only churn and downgrades.
In plain English
GRR tells you how much you'd retain if no customer ever upgraded. NRR mixes the leakage with the expansion; GRR shows just the leakage.
Example
Starting ARR: $2M. Churn: $200k. Downgrades: $50k. (Ignore upgrades for GRR.) GRR = ($2M − $250k) / $2M = 87.5%.
Formula
GRR = (Starting ARR − Downgrades − Churn) / Starting ARR
Why it matters
GRR isolates the retention problem from the expansion solution. A company with 130% NRR and 75% GRR has a leaky bucket masked by aggressive upselling — usually unsustainable. Healthy GRR is 85%+ for SMB SaaS, 95%+ for enterprise.
Common mistakes
- Reporting only NRR and hiding GRR — investors will ask
- Letting GRR drop while celebrating high NRR — the expansion engine usually slows before the churn engine does
- Comparing GRR across segments without adjusting — SMB GRR runs lower by design