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# NRR and GRR calculation (net and gross revenue retention)

| **Summary.** GRR and NRR measure the share of recurring revenue from already-present customers that is retained (GRR), or retained and increased (NRR), from one period to the next. This article explains how Fincome calculates them.

## What are GRR and NRR for?

GRR (*Gross Revenue Retention*) and NRR (*Net Revenue Retention*) answer the same question: among the customers present at the beginning of a period, what share of their recurring revenue is still there at the end?

- **GRR** only accounts for losses: cancellations (churn) and amount decreases (contraction). It is capped at 100%.
- **NRR** starts from the same calculation but adds back expansion (price increases, upgrades, additional volumes). It can therefore exceed 100% when expansion outweighs the losses.

## The formulas

> **GRR** = (MRR at the start of the period − contraction − churn) / MRR at the start of the period
>
> **NRR** = (MRR at the start of the period − contraction − churn + expansion) / MRR at the start of the period

The only difference between the two is the expansion term: GRR excludes it, NRR adds it back.

The calculation is based on MRR, and not on recognized revenue (see [Difference between MRR and revenue recognition](https://help.fincome.co/en/article/difference-between-mrr-and-revenue-recognition-1xzw2qt/)).

The revenue of new customers does not enter either calculation: both the numerator and the denominator cover only the customers already present in the previous period.

## The comparison periods

Fincome compares a period to the previous one of the same nature, over calendar periods:

- **Monthly**: the month compared to the previous month.
- **Quarterly**: calendar quarters (January to March, April to June, etc.).
- **Annual**: calendar year (January to December) compared to the previous year.

To reason over a sliding window rather than calendar periods, you can use Fincome's Rolling Window; the calculation method is then different (see [Analyze your metrics with the Rolling Window](https://help.fincome.co/en/article/analyze-your-metrics-continuously-with-the-rolling-window-9n2vph/)).

## The case of a price increase

For a retained customer who renews at a higher price, the additional MRR is an expansion: it is added back into NRR (which pushes it above GRR) and excluded from GRR. A price increase therefore pulls NRR up without lowering GRR.

## Where to find these movements in Fincome

These events are visible on the MRR movements page, which breaks down each variation into *new*, *expansion*, *contraction*, and *churn*. At the product × customer granularity, it is possible to distinguish expansion tied to price from that tied to volume or cross-sell, provided that quantities and products are filled in on your invoice lines.

## Why do my rates differ depending on the period?

On the same base, a GRR can be high monthly and lower annually (for example 95% monthly, 88% quarterly, 63% annually). It is the same formula applied over windows of different lengths: the longer the window, the more it exposes a large share of the renewal cycle to churn and contraction. The annual view is therefore the most conservative.

## FAQ and common mistakes

**Does the churn rate include the new customers of the period?**
No. Like GRR and NRR, it only covers the customers present at the beginning of the period.

**Why does my NRR exceed 100%?**
Because the expansion of your existing base (price increases, upsell, volumes) outweighs your losses (churn + contraction).

**Can my GRR exceed 100%?**
No. GRR excludes expansion: it is capped at 100%, reached only in the absence of churn and contraction over the period.

**My figures don't match my recognized revenue.**
This is expected: the calculation is based on MRR, and not on recognized revenue. See [Difference between MRR and revenue recognition](https://help.fincome.co/en/article/difference-between-mrr-and-revenue-recognition-1xzw2qt/).