Net Dollar Retention

NDR / NRR: the king of SaaS retention

Net Dollar Retention (also called Net Revenue Retention) tells you how much revenue from an existing cohort grew or shrunk over 12 months: NDR = (Starting ARR + Expansion − Downgrade − Churn) / Starting ARR. Anything above 100% means expansion outpaced your losses, which is the famous net negative churn. To put numbers on it, look at Snowflake 158%, Datadog 130%, Twilio 130%, and MongoDB 120%. Once NDR drops below 90%, you have a real product-market fit or churn problem on your hands. Do not confuse it with GRR (Gross Retention), which leaves expansion out entirely and can never go above 100%.

Context and benchmarks

You will see it front and centre in Series A/B pitch decks and board reports. Investors will pay premium multiples for NDR > 120%, since it points to genuine product-market fit and a consumption-driven model. It is also the number that settles where you put your energy: chasing retention and expansion, or going after new logos.

FAQ

NDR or GRR? NDR counts expansion (upsell and cross-sell), so it can run past 100%. GRR only looks at losses (churn plus downgrade) and tops out at 100%. Report both rather than picking one.

Should new logos enter the calculation? No. NDR looks only at the cohort you already had at the start of the period. Customers you win during the period belong in New ARR.

What is a good NDR by segment? Expect roughly 90–100% in SMB, 100–110% in mid-market, and 110–130%+ in enterprise. Usage-based pricing usually pushes NDR higher than a flat subscription would.