What is Net Dollar Retention (NDR)?
Nexa Consultancy | Startup & Finance Glossary
Net Dollar Retention (NDR) is a SaaS metric that measures the change in recurring revenue from a cohort of customers over a period, taking into account revenue expansion (upgrades, cross-sells) and revenue churn (downgrades, cancellations). It is also known as Net Revenue Retention (NRR).
For Startups: An NDR over 100% is the "holy grail" for SaaS startups. It means the business would grow even if it didn't acquire any new customers, a powerful signal of a sticky product with strong value.
For SaaS: Top-tier public SaaS companies often have NDRs of 120% or more, indicating strong upselling and cross-selling motions.
Calculation: NDR = (Starting MRR + Expansion - Churn) / Starting MRR
Example: A cohort starts with ₹1 Lakh MRR, adds ₹20,000 in expansion, and loses ₹10,000 to churn. The ending MRR is ₹1.1 Lakh. The NDR is 110%.