NDR stands for net dollar retention, also called net revenue retention or NRR: the percentage of recurring revenue retained from existing customers over a period, including expansion, contraction, and churn. NDR above 100 percent means existing customers generate more revenue over time even without adding a single new customer, which is a strong signal of product-market fit and pricing power.
NDR shows whether your existing customer base expands enough on its own to offset the customers you lose. A business with NDR above 100 percent can grow revenue purely from its installed base, which makes new customer acquisition additive rather than essential just to stay flat.
Public market investors reward high-NDR SaaS companies with premium valuation multiples, since NDR compounds: a 120 percent NDR business doubles its existing revenue base roughly every four years before counting a single new logo.
Take your starting MRR for the period. Add expansion MRR from upgrades and seat growth. Subtract contraction MRR from downgrades. Subtract churned MRR from cancellations. Divide the result by starting MRR.
New customers acquired during the period are excluded entirely. NDR only measures what happens to the revenue that already existed at the start of the window.
Starting MRR is $100,000. Expansion adds $15,000. Contraction subtracts $3,000. Churn subtracts $5,000. Net dollar retention equals ($100,000 + $15,000 - $3,000 - $5,000) divided by $100,000, which is 107 percent.
Early-stage B2B SaaS commonly runs 100 to 110 percent NDR. Mid-stage companies target 110 to 120 percent. Late-stage, best-in-class companies often sustain 120 to 130 percent or higher. Always segment by ICP and plan, since enterprise accounts usually expand faster than SMB accounts.
Using bookings instead of live MRR, which overstates NDR if contracts have not actually started billing.
Not excluding one-time or non-recurring revenue from either the starting base or the expansion figure.
Ignoring seasonality, since a single quarter of unusually strong expansion can make NDR look better than the underlying trend.
On your traction slide, show NDR and GDR side by side with the same time window, so investors can see how much of your retention story comes from expansion versus how much comes from simply not losing customers.
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