Metrics & Performance
NDR
Net Dollar Retention (also Net Revenue Retention or NRR) — the percentage of recurring revenue retained from existing customers over a period, including expansions and contractions.
Net Dollar Retention (NDR), also called Net Revenue Retention (NRR) or Net Revenue Expansion Rate, measures how much recurring revenue a SaaS company retains from its existing customer base over a given period (typically 12 months), accounting for both churn and expansion revenue.
NDR above 100% means the company is growing revenue from existing customers faster than it loses it to churn — meaning the company would grow even with zero new customer acquisition. This is the hallmark of a great B2B SaaS business.
Formula: NDR = (Beginning ARR + Expansion − Contraction − Churn) / Beginning ARR × 100
Best-in-class benchmarks: >130% is exceptional, >110% is strong, 100–110% is acceptable, <100% means the company needs new sales just to stay flat.
In Practice
Snowflake reports NDR of 170%+ — meaning existing customers spend 70% more each year than they did the prior year. Salesforce historically runs at ~120%. A struggling SaaS company with 85% NDR is churning more revenue than it's expanding, meaning new sales growth is being eaten up by losses.
Why It Matters
NDR is arguably the most important metric for a SaaS business because it reveals product-market fit within the existing customer base. High NDR means your product delivers increasing value over time, customers expand usage, and growth compounds without proportional sales cost. Low NDR signals that customers aren't getting enough value and are churning or downgrading — no amount of new sales can sustainably offset that.
VC Beast Take
NDR is where the SaaS business model either proves itself or falls apart. The compounding math is relentless: a company with 120% NDR and modest new sales can outgrow a competitor with 90% NDR spending heavily on acquisition. Investors pay premium multiples for high-NDR businesses because the embedded growth is low-risk, recurring, and capital-efficient. When evaluating a SaaS investment, some investors look at NDR before anything else.