SaaS 2028 NRR Target

NRR: (Starting MRR - Churn + Expansion) / Starting MRR. >120% = best-in-class 2028. 100% = no growth from base. <100% = shrinking base.

Cohort starting MRR ($)

Churned MRR ($)

Expansion MRR ($)

Contraction MRR ($)

NRR

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GRR

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Tier

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Cohort end MRR	—
Net Revenue Retention	—
Gross Revenue Retention	—
Tier	—

Net Revenue Retention (NRR): single most important SaaS metric. Measures cohort's revenue evolution: (Starting + Expansion - Churn - Contraction) / Starting. 2028 benchmarks: 100% = static base. 110% = healthy. 120% = great. 130%+ = elite (Snowflake, Datadog peak). NRR drives valuation multiples more than growth rate.

NRR vs Growth Rate

Two SaaS companies, both 40% YoY growth. Company A: NRR 130%, organic from existing base. Company B: NRR 90%, growth from acquisition burn. Same growth rate but Company A worth 3x. NRR shows growth efficiency + product-market fit.

Levers to Improve NRR

Reduce churn: better onboarding, customer success investment, usage analytics. Increase expansion: usage-based pricing, multi-product cross-sell, enterprise upsells. Best NRR companies have explicit expansion motion built into pricing.

Pricing Model Impact

Per-seat pricing: NRR depends on customer hiring. Usage-based pricing (Snowflake, Datadog model): NRR grows with customer adoption automatically. Hybrid increasingly popular: base seats + usage overage.

Last updated May 2026. Sources: Bessemer.