Net revenue retention looks at a group of customers from a starting point, commonly twelve months earlier, and asks how much revenue that same group generates now. The formula takes the starting revenue, adds expansion from upgrades and extra usage, subtracts contraction and lost customers, and divides by the starting revenue.
A result above 100 percent means that existing customers are spending more in total, even after some leave, so the business can grow without adding any new customers. A result below 100 percent means that the base is shrinking and new sales must make up for it. Companies that sell usage-based products can see high figures when customers scale up.
Definitions vary. Companies choose the customer group, the period, whether to include usage or only subscriptions and how to treat customers that are merged or reclassified.
Read the exact definition in the filing, compare the same period over several quarters, and look at it together with growth in new customers.