User retention rate is the percentage of users who continue to use a product or service over a given period of time. It shows how well a company keeps its users engaged, satisfied, and coming back, making it a key metric for long-term growth and customer success.

Formula:

User retention rate = ((Number of users at end of period - New users acquired during period) ÷ Number of users at start of period) × 100

Example:

You start the month with 500 users, gain 100 new ones, and end with 520.

Retention rate = ((520 - 100) ÷ 500) × 100 = 84%