Blog · Board and management reporting
Why gross revenue retention and net revenue retention are computed on the same customers and answer different questions, gross capped at 100 percent as the leak, net with expansion as the growth from the base, the four combinations a cohort can show, leaking and growing, leaking and flat, tight and growing, tight and flat, what each means for where the next dollar comes from, the identity that ties both to the bridge, and why reporting either alone misleads.
Net retention is on every board slide and gross retention on fewer, and a company at 108 percent net and 79 percent gross is growing its base and leaking a fifth of it at the same time. Both figures come from the same customers and belong on one page. This guide sets out each, the four combinations, and the identity.
| Gross retention | Net retention | |
|---|---|---|
| Formula | (start − churn − contraction) ÷ start | (start − churn − contraction + expansion + reactivation) ÷ start |
| Cap | 100% | None |
| Measures | The leak | Growth from the base |
| Question | How much of what we had remains? | Is the base growing itself? |
Same customers, same period, same start.
| Gross | Net | Reading | Where the next dollar comes from |
|---|---|---|---|
| Low | High | Leaking and growing | Expansion is covering churn; fix the leak and the number jumps |
| Low | Low | Leaking and flat | The base is shrinking; retention before anything |
| High | High | Tight and growing | The base is the engine; protect it |
| High | Low | Tight and flat | No expansion motion; cross-sell and upsell are the gap |
Customer identifiers only.
gross retained = start − churn − contraction net retained = gross retained + expansion + reactivation Σ cohorts' movements = ARR bridge, line by line
| Cohort | Start | Churn | Contraction | Gross | Expansion | Reactivation | Net | Combination |
|---|---|---|---|---|---|---|---|---|
| 2024 Q1 | $3.1m | $0.3m | $0.1m | 87% | $1.2m | $0.0m | 126% | Tight and growing |
| 2024 Q3 | $4.4m | $0.6m | $0.3m | 80% | $0.9m | $0.0m | 100% | Leaking and growing |
| 2025 Q1 | $4.0m | $0.7m | $0.4m | 72% | $0.4m | $0.0m | 82% | Leaking and flat |
| All | $11.5m | $1.6m | $0.8m | 79% | $2.5m | $0.0m | 101% | Leaking and growing |
The company is leaking and growing. One cohort is tight and growing; one is leaking and flat. The board that sees only 101 percent sees none of it.
Net alone. The leak invisible under the growth.
Gross alone. The growth invisible under the leak.
Gross above 100. Expansion counted; the wrong name.
Company level only. The 2025 Q1 cohort inside the 101.
Mapped once, the subscription ledger and the customer master produce gross and net per cohort, the combination, and the reconciliation to the bridge every quarter. Covirage builds this from the exports as they are. The board reporting solution describes the setup, and the net revenue retention guide covers the cohort table in depth.
Because gross retention asks how much of what you started with is still there, and the answer cannot be more than all of it. Expansion is a different question, and it belongs in net. A gross figure above 100 has counted expansion and is a net figure with the wrong name.
Both, on one page, per cohort. A board that sees net at 108 percent and not gross at 79 believes the base is healthy; one that sees gross at 79 and not net at 108 believes it is leaking without growth. The pair is the reading.
Starting ARR less churn less contraction equals gross retained; gross retained plus expansion plus reactivation equals net retained; and the sum across cohorts of each movement equals the ARR bridge's line for it. A pair of figures that do not decompose that way is not the pair.