What is Gross Revenue Retention (GRR)?

Gross Revenue Retention (GRR) is a financial metric used to measure the percentage of recurring revenue retained from existing customers over a specific period, excluding any additional revenue from upsells, cross-sells, or expansions.

For businesses operating on subscription-based models—such as SaaS companies—GRR provides insight into customer retention effectiveness. Unlike Net Revenue Retention (NRR), GRR focuses solely on maintaining existing revenue streams, offering a conservative yet crucial perspective on business stability.

Key Takeaway: GRR answers the question, “How much of our recurring revenue are we retaining from our current customer base, without factoring in growth?”

How to Calculate Gross Revenue Retention (GRR)?

The formula for GRR is straightforward and focuses on retained revenue:

Where:

• Starting MRR: Monthly Recurring Revenue at the beginning of the period.

• Churned Revenue: Revenue lost from customers who canceled their subscriptions.

• Downgraded Revenue: Revenue reduction from customers who switched to lower-tier plans.

Example Calculation: Suppose your company starts with $50,000 in MRR at the beginning of the month:

• You lose $5,000 in revenue due to cancellations.

• You lose another $3,000 from customers downgrading their plans.

GRR = 84%

In this example, your business retained 84% of its starting revenue for the period, excluding upsells or cross-sells.