What is gross retention?
Gross retention measures how much recurring revenue a business keeps from its existing customer base over a period, counting only losses — churn and downgrades — and ignoring any expansion. Because it gives no credit for upsell, it can never exceed 100%. It is the purest measure of how leaky a customer base is.
The metric isolates a single question: of the revenue you started the period with from existing customers, how much did you keep? It strips out the masking effect of expansion, so a business that is losing customers cannot hide that fact behind upsell to the ones who remain.
Gross retention is read alongside net revenue retention, never in isolation. Net retention shows whether the base grows on its own; gross retention shows whether it is fundamentally sticky. The two together tell a far more honest story than either alone.
How gross retention is calculated
Like net retention, gross retention follows a fixed cohort of existing customers — but it counts only the downside.
- Fix the cohort. Take the recurring revenue from customers who existed at the start of the period.
- Subtract churn. Remove the revenue from customers who left entirely during the period.
- Subtract contraction. Remove revenue lost to downgrades and reduced usage among customers who stayed.
- Ignore expansion. Do not add back any upsell or growth — this is the key difference from net retention, and the reason gross retention is capped at 100%.
- Divide. Express the remaining revenue as a percentage of the starting cohort's revenue.
The discipline of excluding expansion is what makes gross retention a clean read on stickiness. A high gross retention figure means customers and their spend rarely leave; the closer it is to 100%, the more durable the base.
Reading gross and net retention together
The pair are most informative as a gap. Gross retention is capped at 100% and measures leakage; net revenue retention can exceed 100% and measures leakage net of expansion. Subtracting one from the other reveals how much of the picture depends on expansion versus underlying stickiness.
A business with high net retention but low gross retention is offsetting heavy churn with aggressive expansion among survivors — strong-looking but fragile, because the expansion can stall while the churn continues. A business with high gross retention has a genuinely sticky base, and any net retention above 100% on top of that is compounding from a solid floor. Sponsors look at both precisely to avoid being misled by a flattering net number.