Gross Revenue Retention (GRR)
The share of recurring revenue from existing clients kept over a year, counting losses and downgrades but not expansion.
Formula
(Starting MRR − Churned MRR − Contraction MRR) ÷ Starting MRR × 100
Why Track It
GRR shows how much of the revenue base is leaking before any growth covers it up. Buyers use it to judge how durable the recurring revenue really is.
How It Is Measured
Take recurring revenue from clients active twelve months ago. Subtract revenue lost to cancellations and to reduced seats or services. Divide by the starting recurring revenue. Do not add upsells or price increases; that is net revenue retention. Source: PSA agreement history or billing system.
Constraints
Client seat reductions caused by the client's own layoffs count as contraction even when service was excellent. It needs clean agreement history to separate contraction from churn.
Measurement Note
Breakwater M&A says MSP buyers expect gross revenue retention above 90%, ideally above 95%. GRR cannot exceed 100%, which makes it the honest view of leakage.
Referenced In
Related KPIs
- Logo Churn RateThe percentage of managed services clients that ended their agreement during the year.
- Net Revenue Retention (NRR)The recurring revenue from existing clients a year later, including expansion and price increases, as a percentage of what they paid a year ago.
- Largest Client Share of RevenueThe percentage of total revenue that comes from the single largest client, with the top three clients tracked beside it.
Glossary and Answers
More in Client Health
Whether clients stay, spend more and would recommend the MSP. These numbers warn an owner about revenue at risk before the cancellation notice arrives.
- Client Net Promoter Score (NPS)Account Manager Lead
- Largest Client Share of RevenueOwner
- Logo Churn RateAccount Manager Lead
- Net Revenue Retention (NRR)Account Manager Lead