9 CHAPTER 1 METRICS AND PERFORMANCE MEASUREMENTS 02 Gross Revenue Retention Cohort Cohort size Share of initial MRR against remaining MRR (after contraction and churn) Initial $ MRR Sign-up month added Month 0 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Month 13 2021 July 54,701 100% 98% 96% 93% 91% 91% 89% 89% 89% 87% 85% 85% 77% 75% 2021 August 44,136 100% 97% 97% 95% 94% 92% 90% 88% 86% 85% 83% 83% 74% 72% 2021 September 55,887 100% 98% 96% 94% 92% 92% 92% 90% 87% 85% 84% 83% 76% 75% 2021 October 46,883 100% 98% 97% 95% 93% 91% 90% 88% 88% 86% 85% 85% 78% 2021 November 49,531 100% 100% 98% 97% 97% 95% 93% 92% 92% 90% 88% 87% 2021 December 63,112 100% 98% 96% 95% 94% 92% 92% 91% 90% 90% 90% 2022 January 63,888 100% 100% 99% 99% 99% 99% 97% 96% 95% 95% 2022 February 63,112 100% 99% 99% 97% 96% 95% 95% 95% 95% 2022 March 64,986 100% 99% 98% 98% 98% 96% 95% 95% 2022 April 56,902 100% 100% 100% 100% 99% 99% 99% 2022 May 57,113 100% 99% 99% 99% 99% 99% 2022 June 57,561 100% 100% 100% 99% 99% 2022 July 72,004 100% 100% 100% 99% 2022 August 75,163 100% 99% 99% 2022 September 75,864 100% 100% 2022 October 75,693 100% Weighted average 100% 99% 98% 97% 96% 95% 94% 92% 91% 89% 86% 84% 76% 74% The weighted average gross revenue retention rate is in relation to the initial MRR or ARR added from each cohort. Gross revenue retention is similar to logo retention, but instead of measuring how many of the initially acquired customers remain, it measures how much of the initially acquired recurring revenue remains. By analyzing gross revenue retention, you can draw similar conclusions as you would from analyzing logo retention. However, if you compare the two figures, you gain additional insights about the company. If gross revenue retention is higher than logo retention, the company is better at retaining its larger, more revenue-generating customers. If gross revenue retention is lower than logo retention, it suggests the opposite. In the example, where the one-year average gross revenue retention is 76% and the logo retention is 67%, we can immediately see that the company is better at retaining its higher paying customers. WHAT GREAT LOOKS LIKE ▪ >90% gross revenue retention for enterprise clients, >80% gross revenue retention for SMB clients ▪ Retention is consistent across the cohort and not driven by a few power-users