Net Revenue Retention by Cohort

Gross retention tells you how much revenue you kept. Net retention tells you how much you have after accounting for expansion. A cohort with 85% gross retention and 25% expansion revenue has 106% net retention — the base is shrinking but expansion is more than offsetting it. This is a common pattern in usage-based SaaS: customers who stay grow, but a meaningful percentage leave. Whether this is healthy depends on the cost of acquiring replacements for the churned customers versus the margin on expansion.

Q2-25 Cohort — 12-Month Retention:
──────────────────────────────────────────────
              Gross Ret.   Expansion   Net Ret.
──────────────────────────────────────────────
Month 3          96%         +3%        99%
Month 6          91%         +8%        99%
Month 9          87%        +15%       102%
Month 12         83%        +25%       108%
──────────────────────────────────────────────

Gross retention tells you 17% of revenue
churned or contracted. Net retention tells
you expansion more than compensated. But
there is a ceiling — at some point the
churned base becomes too large for
expansion to offset.