Gross Revenue Retention (GRR)

GRR measures how well a company holds on to the revenue it already has. Because upgrades and expansion are excluded, it can never exceed 100%.

It is calculated by taking recurring revenue from existing customers at the start of the period, subtracting revenue lost from downgrades and cancellations, and dividing by the starting revenue.

For example, a company starts the year with 10,000,000 of annual recurring revenue. It loses 500,000 through downgrades and 700,000 through cancellations. Its GRR is 8.8 million divided by 10 million, or 88%.

GRR complements net revenue retention. A company may have strong NRR because a few customers expanded a lot, while still losing many others. GRR reveals this underlying loss. A high GRR suggests customers find the product essential and are unlikely to leave. It is particularly important for judging the stability of a subscription business's revenue base.