Both SaaS Quick Ratio and Net Revenue Retention (NRR) measure revenue health — but they answer different questions.
NRR (Net Revenue Retention)
NRR measures what percentage of your existing ARR you retained after expansion and contraction/churn, excluding new logos.
Formula: NRR = (Starting ARR + Expansion − Contraction − Churn) / Starting ARR × 100
- NRR > 100%: existing customers are growing your ARR without any new sales
- NRR = 100%: flat — expansion offsets all churn
- NRR < 100%: churn exceeds expansion
SaaS Quick Ratio
Quick Ratio measures the quality of all MRR growth — new logo acquisition + expansion versus contraction + churn.
Formula: Quick Ratio = (New MRR + Expansion MRR) / (Contraction + Churned MRR)
When to use each
| Question | Use |
|---|---|
| "Is our retention world-class?" | NRR |
| "Is our growth high-quality?" | Quick Ratio |
| "Investor due diligence on ARR quality" | Both |
| "Monthly MRR health check" | Quick Ratio |
Track both: NRR for long-term revenue durability, Quick Ratio for monthly growth quality.
Calculate yours at the SaaS Quick Ratio Calculator.