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# Growth

Growth shows how your monthly recurring revenue (MRR) develops: which customers start, expand, contract or churn each month, how much revenue you retain, and how each cohort of customers holds up over time. These are the metrics boards and investors ask for. Use them to understand the quality of your revenue growth, not only its size.

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## How MRR is calculated

Every metric on this page starts from the MRR of each customer in each calendar month.

* **Recurring lines only.** MRR counts invoice lines priced with the fixed pricing model, and lines without a pricing model such as discounts. Usage and one-off revenue are not part of MRR. A customer who only pays for usage doesn't appear on this page.
* **Spread over the service period.** Each line's amount, excluding tax, is spread over the months of its service period: equally over whole months, and by the number of days for a partial month. An annual fee of €12,000 for 1 January to 31 December counts as €1,000 in every month, not €12,000 in January.
* **Final invoices, plus the latest in-flight ones.** MRR counts final invoices, and also open and draft invoices for the current and the previous month. That way, customers billed in arrears don't look churned while last month's invoice is still waiting to be finalised. Future invoices and older invoices that were never finalised don't count.
* **Up to the current month.** Months after the current month are left out, even when an invoice already covers them.
* **Credit notes reduce MRR** in the months they cover. A customer's MRR never goes below 0.
* **Reporting currency**, converted at the exchange rate of the invoice date.

The page is recalculated every hour.

## MRR movements

Each month, Insights compares every customer's MRR with their MRR in the previous month and classifies the change as one movement:

| Movement        | Rule                                                                                    | Contribution to net MRR change |
| :-------------- | :-------------------------------------------------------------------------------------- | :----------------------------- |
| **New**         | MRR last month was 0, this month above 0. Includes customers who return after churning. | + this month's MRR             |
| **Expansion**   | This month's MRR is higher than last month's                                            | + the increase                 |
| **Contraction** | This month's MRR is lower than last month's, but above 0                                | − the decrease                 |
| **Churn**       | MRR last month was above 0, this month 0                                                | − last month's MRR             |
| **Retained**    | MRR is unchanged                                                                        | 0                              |

**`Formula`**

```text Formula
Net MRR change = New MRR + Expansion MRR − Contraction MRR − Churned MRR
```

A customer is active in a month when their MRR is above 0. A customer billed annually stays active every month of the year, because the fee is spread over the service period.

## Key figures

The four key figures cover the last 12 months.

### NRR (last 12 months)

Net revenue retention measured month by month: of the MRR existing customers had at the start of each month, how much they still had at its end, including expansion. New customers are left out.

**`Formula`**

```text Formula
NRR = (Σ starting MRR + Σ expansion MRR − Σ contraction MRR − Σ churned MRR) ÷ Σ starting MRR × 100
```

Each sum runs over the 12 monthly steps; starting MRR is every customer's MRR in the month before. The result is the MRR-weighted average monthly retention over the year, so values close to 100% are normal: 100% means expansion exactly made up for contraction and churn, above 100% means your existing customers grew.

> **Note**
>
> The NRR tile on [Details: Revenue](/platform-guides/analytics-reporting/insights/details/revenue#net-revenue-retention-nrr) compares two full 12-month periods instead: what your customers paid in the last 12 months against what the same customers paid in the 12 months before. That figure shows annual retention; this one shows the average month. They are expected to differ.

### GRR (last 12 months)

Gross revenue retention: the same as NRR, but without expansion. It shows how much revenue you lose, regardless of how much existing customers grow.

**`Formula`**

```text Formula
GRR = (Σ starting MRR − Σ contraction MRR − Σ churned MRR) ÷ Σ starting MRR × 100
```

GRR can't exceed 100%. The gap between NRR and GRR is the share of revenue that comes from expansion.

### Churned MRR (last 12 months)

The MRR you lost from customers who went to 0, summed over the last 12 months.

**`Formula`**

```text Formula
Churned MRR = Σ last month's MRR of every customer whose MRR dropped to 0, over the last 12 months
```

### Net new MRR (last 12 months)

How much MRR grew or shrank in total over the last 12 months.

**`Formula`**

```text Formula
Net new MRR = Σ net MRR change over the last 12 months
```

It equals the difference between your MRR now and 12 months ago.

## Cohort heatmaps

A **cohort** is every customer whose first month with MRR above 0 is the same calendar month. Each row of a heatmap is a cohort; each column is the number of months since that first month, up to 18. Month 0 is the cohort's first month, so it is always 100%.

### Customer retention by cohort: % retained (count)

The share of a cohort's customers that still have MRR above 0, a given number of months later.

**`Formula`**

```text Formula
Retention (cohort C, month n) = customers of C with MRR > 0 in month n ÷ customers in C × 100
```

Use it to see whether customers stay. A row that drops fast in the first months points to an onboarding or fit problem; a later cohort that holds up better than earlier ones means retention is improving.

### Revenue retention by cohort

A cohort's MRR a given number of months later, compared with its MRR in month 0.

**`Formula`**

```text Formula
Revenue retention (cohort C, month n) = MRR of C in month n ÷ MRR of C in month 0 × 100
```

Cells above 100% mean the customers who remain spend more than the whole cohort did at the start, enough to make up for those who left. The colours diverge around 100%: one colour for growth, another for decline.

## MRR movement

A bar per month for the last 12 months, stacked by movement: new and expansion above the axis, contraction and churn below it. The top of the positive stack minus the bottom of the negative stack is that month's net MRR change.

**`Formula`**

```text Formula
Bar for month M = New MRR + Expansion MRR − Contraction MRR − Churned MRR, each for month M
```

Use it to see what drives growth: new business, expansion of existing customers, or lower churn.

## Customers behind the movement

A table of customers with their net MRR change and its components: new, expansion, contraction and churned MRR, for the last 12 months, sorted by net MRR change. Click a bar segment in the MRR movement chart to filter the table to that month and movement, for example to see exactly which customers churned in March.

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