MSP KPI Definition
MSP Net Revenue Retention: Definition & Formula
Net revenue retention measures how the recurring revenue of an existing client cohort changes after losses, reductions and expansion. Exclude new clients. Illustrative example: $100,000 starting MRR minus $3,000 in losses plus $8,000 in expansion produces 105% retention. Here NRR means net revenue retention; in the MSP Fuel planner and NRR-to-MRR ratio, NRR means nonrecurring project revenue. Spell out the term to avoid mixing these unrelated measures.
By MSP Fuel · Examples are illustrative.
Target interpretation
Context matters
Set the target against your service scope and company plan.
Formula
Net revenue retention % = (starting recurring revenue − cancellations − contractions + expansion) ÷ starting recurring revenue × 100
Why it matters
It shows whether the existing client base grows or shrinks before new-logo sales.
A strong total can hide individual client losses, so review gross churn too.
Common mistakes
Including revenue from clients acquired after the cohort start.
Confusing recurring retention with nonrecurring project revenue.
Treating a retention rate above 100% as proof every client is healthy.
What moves the number
Keep the original client cohort fixed through the observation period.
Break movement into cancellations, reductions and expansion.
Review the client strategy and delivery work behind each movement.
Related MSP Fuel resources
Your company plan sets the target, priority and timing for improving this number from your current position.
Further reading: Stripe: net revenue retention and gross retention. External definitions provide context; MSP Fuel model-specific classifications are explained above.