---
title: "What is GRR? Gross Revenue Retention meaning & calculation"
description: "GRR, or Gross Revenue Retention, is a crucial SaaS metric. Learn the GRR meaning, how to calculate GRR, and its importance in SaaS."
url: https://www.fenerum.com/en-DK/dictionary/grr/
---
## What is GRR?

GRR, short for Gross Revenue Retention, refers to the percentage of recurring revenue a company retains from its existing customers over a specific period, excluding any revenue gained from expansions, upsells, or cross-sells. GRR focuses only on revenue lost due to customer [churn](https://www.fenerum.com/en-DK/dictionary/churn-rate.md) and downgrades, providing a clear picture of how well a company retains its core revenue base.

_How to calculate Gross Revenue Retention (GRR)._

## How to calculate GRR

Calculating and tracking GRR helps businesses understand the health and predictability of their recurring revenue. For [SaaS companies](https://www.fenerum.com/en-DK/dictionary/saas.md), GRR is a key metric for evaluating customer [retention](https://www.fenerum.com/en-DK/dictionary/retention.md) and revenue stability.

Calculating GRR is straightforward if you have the right data.

```
GRR = (Starting MRR - Churned MRR - Contraction MRR) / Starting MRR
```

Where:

- **Starting MRR:** [Monthly Recurring Revenue](https://www.fenerum.com/en-DK/dictionary/mrr.md) from existing customers at the beginning of the period.
- **Churned MRR:** Revenue lost from customers who canceled their subscriptions.
- **Contraction MRR:** Revenue lost from customers who downgraded their subscriptions.

For example, if a company starts the month with $10,000 in MRR, loses $500 to churn, and $200 to downgrades, the GRR calculation would be:

```
GRR = ($10,000 - $500 - $200) / $10,000 = $9,300 / $10,000 = 93%
```

## GRR meaning in SaaS

For SaaS businesses, GRR is a fundamental metric because it measures the stability and health of the existing revenue base. High GRR indicates that a company is effective at retaining its customers and minimizing revenue loss from downgrades and churn. This predictability is essential for long-term planning, budgeting, and forecasting.

Key points about GRR in SaaS:

- **Churned MRR:** Revenue lost from customers who cancel.
- **Contraction MRR:** Revenue lost from customers who downgrade.
- **Excludes:** Any revenue gained from expansions, upsells, or reactivations.

GRR is often compared to Net Revenue Retention (NRR):

- **GRR:** Excludes expansions and upsells, always capped at 100%.
- **[NRR](https://www.fenerum.com/en-DK/dictionary/nrr.md):** Includes expansions and upsells, can exceed 100% if expansions outpace churn.

## GRR Benchmarks

Gross Revenue Retention (GRR) benchmarks also vary by company size and market, but here are some typical ranges for SaaS companies:

- **GRR below 90%:** Indicates significant revenue loss from churn and downgrades. This is a red flag and suggests a need to address customer retention.
- **GRR of 90%–95%:** Common for many SaaS businesses, especially those serving SMBs. Indicates moderate churn but generally healthy retention.
- **GRR of 95%–99%:** Strong performance, often seen in mature or enterprise-focused SaaS companies. Reflects effective customer success and retention strategies.
- **GRR of 99%–100%:** Exceptional retention, rare even among top SaaS companies. Indicates minimal churn and downgrades.

**Note:** Unlike NRR, GRR cannot exceed 100% since it excludes expansion revenue. Benchmarks may differ by industry and customer type.

## Conclusion

Understanding GRR and its importance is essential for SaaS business growth. Gross Revenue Retention reflects a company's ability to retain its core recurring revenue. By focusing on customer satisfaction, addressing churn, and continuously improving the product, companies can maximize their GRR and ensure long-term growth and stability.

To make tracking and improving GRR easier, consider automating the calculation process. [Book a demo of Fenerum](https://www.fenerum.com/book-demo/)

## More resources

- [Annual Recurring Revenue (ARR)](https://www.fenerum.com/en-DK/dictionary/arr.md)
- [Monthly Recurring Revenue (MRR)](https://www.fenerum.com/en-DK/dictionary/mrr.md)
- [MRR SaaS: Calculate and Improve Monthly Recurring Revenue](https://www.fenerum.com/en-DK/blog/calculate-and-improve-saas-mrr.md)

---

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