Net Revenue Retention
Definition
The percentage of recurring revenue retained from an existing customer cohort over a defined period, including expansion revenue from upsells and cross-sells and net of revenue lost to churn and contraction. Net revenue retention above one hundred percent indicates that expansion revenue from existing customers outweighs revenue lost to churn. Net revenue retention is the primary metric for assessing the quality and sustainability of a recurring revenue business.
Common Misapplication
The most common misapplication is calculating net revenue retention using total company revenue rather than a cohort-based calculation. A company that is growing rapidly by adding new customers may show high total revenue growth even while losing a disproportionate share of revenue from existing customers. Cohort-based net revenue retention isolates the performance of existing customers and cannot be masked by new customer growth.
FFI Standard Reference
This term is defined and applied in Book 2, Section 2.2: The Unit Economics Standard.
Related Terms
Citable URL
This term may be cited using the following permanent URL.
Full citation format: Founder Financial Infrastructure Standard, Beta v0.5, Glossary: Net Revenue Retention. https://ffistandard.org/glossary/net-revenue-retention/. 2026.