Quick answer
Learn how to calculate gross revenue retention for SaaS and why GRR reveals retention issues that expansion revenue can hide.
Core formulas
GRR = (starting MRR - contraction MRR - churned MRR) / starting MRR
GRR excludes expansion MRR.Gross revenue churn = (contraction MRR + churned MRR) / starting MRR
Gross revenue churn is the revenue loss before expansion.Retained MRR = starting MRR - contraction MRR - churned MRR
This is the numerator of the GRR calculation.Worked example
GRR example
- Starting MRR is $50,000.
- Contraction MRR is $2,000.
- Churned MRR is $3,000.
- Expansion MRR is $6,000, but it is excluded from GRR.
Why GRR is stricter than NRR
NRR can look strong when expansion is high. GRR removes expansion so the underlying loss rate is easier to see. This helps founders avoid celebrating upgrades while ignoring downgrades and cancellations.
A SaaS company can have NRR above 100% and still have a retention problem if GRR is weak. That usually means expansion from retained customers is carrying the model.
When to watch GRR closely
GRR becomes especially useful when a product serves customers with very different plan sizes. Losing a few high-value customers can be more damaging than losing many small accounts, and GRR keeps the focus on recurring revenue retained.
- Track GRR when churned customers tend to be larger than average.
- Track GRR when expansion revenue is concentrated in a few large accounts.
- Compare GRR by customer segment, plan and acquisition channel when possible.
How to use the calculator
Use the MRR growth calculator to enter starting MRR, contraction MRR and churned MRR. For GRR, ignore expansion in the numerator. For NRR, include expansion.
Use the calculators
FAQ
Can GRR be above 100%?
No. Because GRR excludes expansion, it is normally capped at 100%. NRR can be above 100%.
Why calculate GRR if I already know churn?
GRR captures revenue lost from both churn and contraction. Customer churn alone can miss downgrades and plan-size differences.
Should failed payments count in GRR?
If failed payments reduce recurring revenue in the period, track them consistently. Many teams also separate involuntary churn for operational follow-up.