What it means
Net revenue retention takes a group of customers as they were a year ago and asks how much of their recurring revenue is still arriving today. Cancellations and downgrades pull the figure down, upgrades and added seats push it up, and the net result is expressed as a percentage. It is a cohort measure, which is what makes it more useful than a single month's churn rate.
Why it can exceed 100%
If the customers who stay spend more than the departing ones took with them, retention goes above 100% and revenue grows without a single new signup. That is the strongest structural position a subscription business can be in, and it is why the figure is watched so closely. A product priced by usage or seats reaches it more easily than one on a flat fee, because growth in the customer's own business raises your revenue automatically.
What it hides
A high figure can conceal heavy losses among small customers if a few large accounts are expanding fast. That matters because concentration is its own risk: retention of 115% driven by two accounts is a different business from 115% spread across two hundred. Always read it alongside logo churn and the revenue share of the largest customers.
What buyers do with it
They use it to decide whether they are buying a growing base or a decaying one. Below roughly 70% the product is not holding what it wins, and the price reflects a turnaround. Around 100% the base sustains itself and the multiple sits at the category norm. Above that, the buyer is acquiring built-in growth and will usually pay for it, provided the figure is evidenced by cohort tables rather than asserted.
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