Business & finance · also called NRR, net dollar retention, NDR
Net revenue retention
Net revenue retention (NRR) is the percentage of revenue a company keeps from an existing group of customers over a period, including expansions, downgrades and losses, but excluding new customers.
Net revenue retention answers: "If we stopped signing new customers, would revenue from our existing customers grow or shrink?" Take the customers you had a year ago, compare their revenue now with then, and express it as a percentage. Upsells and higher spend push it up; cuts and lost customers push it down.
The formula is NRR = (starting revenue + expansion - contraction - churn) ÷ starting revenue × 100. Above 100% means existing customers are spending more overall. Software-as-a-service companies popularised it, and ad tech platforms with repeat enterprise customers, such as DSPs, SSPs, measurement vendors and data companies, often report customer retention metrics in a similar spirit.
NRR is not standardised: companies choose cohorts, time windows and definitions, and it is often reported selectively when it looks good. For usage-based ad tech businesses, it also swings with overall advertising market conditions rather than just customer satisfaction.
Think of it like this
Net revenue retention is like a gym measuring whether last year's members are paying more this year, after some upgraded to premium and a few cancelled.
An example
Customers who paid US$100M last year pay US$118M this year after US$25M of expansion, US$4M of downgrades and US$3M of churn. NRR = 118%.
Related terms
Earnings report
An earnings report is the periodic announcement, usually quarterly, in which a public company discloses its revenue, profit and other key results, often with an investor call and updated guidance.
Gross spend (gross billings)
Gross spend is the total amount of advertising money that flows through a platform, including the portion paid on to publishers and partners, rather than just the platform's own revenue.
Guidance (forecast)
Guidance is a public company's own forecast of its future results, such as next quarter's revenue or full-year adjusted EBITDA, usually given as a range alongside an earnings report.
Adjusted EBITDA
Adjusted EBITDA is earnings before interest, taxes, depreciation and amortisation, further adjusted by the company to exclude items such as stock-based compensation and one-time costs; it is a non-GAAP measure.
KPI
A KPI (key performance indicator) is the specific, measurable metric an advertiser or publisher chooses in advance to judge whether a campaign or business is succeeding.