How to Calculate Gross Revenue Retention
Gross revenue retention (GRR) measures how much recurring revenue from an opening cohort survives after downgrades and churn. Operators use it to prove that customer success defends the core book before counting new sales, making it a natural companion to the Net Dollar Retention calculator.
GRR is reported as a percentage; values around 95% point to a resilient book, while repeated dips toward 90% signal rising risk.
Definition and reporting boundary
GRR is the share of opening recurring revenue that survives downgrades and churn within a fixed cohort. Expansion revenue stays out so the metric isolates durability.
Set the boundary first: pick a cadence, freeze day-one customers, document billing rules, and exclude mid-period logos.
Variables, symbols, and units
Keep every variable in one currency and cadence. MRR in US dollars is typical, but any currency or ARR works when conversions stay consistent. Pull figures from revenue systems, not ad hoc sheets.
- MRRstart – Opening cohort MRR on day one (e.g., USD).
- MRRdown – Downgrade MRR booked during the window (same units).
- MRRchurn – Churned MRR from fully cancelled accounts (same units).
- MRRcredit – Optional credits or recoveries offsetting churn (same units, default 0).
- GRR – Gross revenue retention as a percentage.
Primary formula and supporting expressions
Once scope is fixed, subtract downgrades and churn from the starting balance, add documented credits, and divide by the starting balance. Report the ratio with consistent rounding.
Retained MRR: MRRretained = max(MRRstart − MRRdown − MRRchurn + MRRcredit, 0)
Gross revenue retention: GRR = (MRRretained ÷ MRRstart) × 100%
The max() term blocks negative retained revenue. If MRRstart equals zero, revisit the cohort before publishing.
Step-by-step calculation workflow
Step 1: Freeze the cohort baseline
Snapshot customer IDs and opening MRR, convert ARR when needed, exclude one-off charges, and archive the baseline.
Step 2: Quantify downgrades
Pull change logs, record old versus new MRR for each downgrade, and prorate adjustments per policy.
Step 3: Capture churned revenue
Aggregate cancellations, include involuntary churn, and convert annual contracts into monthly equivalents.
Step 4: Record recoveries and credits
Log reactivations, invoice credits, or make-goods that offset churn; otherwise leave the field at zero.
Step 5: Compute GRR and archive evidence
Apply the formula, round to two decimals, and file the baseline and ledgers with the reported percentage.
Validation and reconciliation
Reconcile starting MRR plus movements to the ending balance; mismatches expose misclassification. Cross-check downgrade and churn lists with customer success systems and scan segment averages for anomalies.
Nudge inputs within error bands to show sensitivity, then present GRR beside net dollar retention, the Rule of 40 walkthrough, and the Customer Retention Rate calculator so durability, expansion, and logo health share one frame.
Limitations and interpretation
GRR ignores expansions, so a company can post 85% yet still grow, while near-100% may hide shrinking adoption; pair the metric with pipeline reviews and cohort dashboards.
Stable pricing and billing assumptions matter: compute GRR in local currency before translating and annotate major events that shaped downgrades or churn.
Embed: Gross revenue retention calculator
Use the embedded calculator below to operationalise the workflow. It applies the same definitions, enforces non-negative inputs, and outputs the retained MRR alongside the percentage so you can paste results directly into revenue dashboards.