ARR is easy. Healthy ARR is the real question.
Anyone can multiply MRR by 12. What separates an operator's ARR from a vanity number is the bridge underneath it — and the one ratio it reveals: Net Revenue Retention. Here's how it all fits together.
The ARR bridge
ARR isn't one number, it's a waterfall. Start with the ARR you had, add what you won, subtract what you lost, and you land on where you ended — and exactly where every dollar moved.
Ending ARR = Beginning + New + Expansion − Contraction − Churned
What good retention looks like
Net Revenue Retention is what last year's customers are worth today — expansion included, churn and contraction taken out — as a share of where they began. Above 100%, your base grows before you add anyone new. Your live result lands on this same scale the moment you build the bridge.
Leaky — You're losing more than you keep — churn is eating into growth.
Healthy — Solid retention — your base holds, but growth leans on new business.
Strong — Expansion is clearly outpacing churn and contraction.
Best-in-class — Top-decile SaaS retention — expansion is compounding your base.
NRR vs GRR — read them together
Net Revenue Retention can hide a leak: a few big upsells can mask heavy churn underneath. That's why you read it alongside Gross Revenue Retention — the same base minus losses only, no credit for expansion. GRR caps at 100% and tells you how leaky the bucket is before sales pours more in. Strong SaaS keeps GRR above ~90% and NRR above ~110%.
Growth slows as you scale — that's normal
A 70% growth rate is heroic at $40M ARR and ordinary at $400K. The calculator places your Ending ARR into a stage and compares your growth to the typical range for companies that size.
| Early (< $1M ARR) | ~75% YoY |
| Growth ($1M–$10M ARR) | ~60% YoY |
| Scaling ($10M–$50M ARR) | ~45% YoY |
| Late ($50M+ ARR) | ~30% YoY |
Churned ARR is the leak you can plug
Of every line in the bridge, churned ARR is the one most in your control — and the most preventable cause of churn is slow, frustrating support. Customers don't leave because of one bad day; they leave after a string of unanswered tickets. Cutting response time and following up at scale is the cheapest way to bend the bridge upward. See how Selvo's AI agent does it.
