Commonly Confused Terms: GRR Versus NRR

#Finance #CommonlyConfusedTerms

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GRR and NRR stand for Gross Revenue Retention and Net Revenue Retention respectively. These metrics help assess the health of a company's recurring revenue especially in the case of subscription-based business models:

• Gross Revenue Retention (GRR):

  • GRR measures the total revenue retained from existing customers over a specific period, typically a year, without accounting for any new sales or expansion revenue

• Net Revenue Retention (NRR):

  • NRR goes a step further by including the impact of expansion revenue from existing customers (e.g., upgrades and upsells) in addition to the revenue retained from existing customers