What is Net Dollar Retention (NDR)?
Net Dollar Retention is the percentage change in recurring revenue from existing customers, including expansion, contraction, and churn.
Net Dollar Retention is the percentage change in recurring revenue from existing customers, including expansion, contraction, and churn. It measures whether your customer base is growing or shrinking independently of new customer acquisition.
NDR = (Starting MRR + Expansion - Contraction - Churn) ÷ Starting MRR × 100
NDR above 100% means your existing customers spend more over time — you grow even without new customers. NDR below 100% means your customer base is eroding.
Benchmarks: below 90% is concerning, 90-100% is average, 100-120% is good, 120-140% is excellent, 140%+ is elite. The best SaaS companies (Snowflake 158%, Datadog 130%) prove that existing customers can be the primary growth engine.
NDR is functionally identical to Net Revenue Retention (NRR). The terms are used interchangeably in the industry.
Why It Matters
NDR is the single best predictor of SaaS company valuation and the metric most scrutinized by investors. Companies with NDR >120% trade at dramatically higher multiples because they grow automatically through expansion.
Frequently Asked Questions
What is NDR?
Net Dollar Retention measures whether existing customers spend more or less over time, including expansion, contraction, and churn. NDR above 100% means growth from existing customers.
Is NDR the same as NRR?
Yes. Net Dollar Retention (NDR) and Net Revenue Retention (NRR) are interchangeable terms for the same metric.
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Richard Ewing is a Product Economist and AI Capital Auditor. He helps companies translate technical complexity into financial clarity.
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