NDR (Net Dollar Retention)

Definition

NDR is another name for NRR in dollar terms. It measures how existing revenue changes including expansion.

Formula

NDR = (starting revenue + expansion - contraction - churn) / starting revenue

Example

If starting revenue is $100k, expansion is $20k, contraction is $5k, and churn is $10k, NDR = ($100k+$20k-$5k-$10k)/$100k = 105%.

How to use it

• Track NDR by cohort and segment to see where expansion is durable.
• Pair NDR with GRR to understand how much expansion masks churn.
• Use NDR trend to forecast net retention contribution to growth.

Common mistakes

• Reporting NDR without separating expansion from price increases.
• Using blended NDR and missing weak cohorts or segments.

Why this matters

This term matters because small changes compound in SaaS metrics. Use consistent definitions by cohort and segment so you can diagnose retention, payback, and growth quality.

Practical checklist

• Write a 1-line definition for "NDR (Net Dollar Retention)" that your team will use consistently.
• Keep the time window consistent (weekly/monthly/quarterly) when comparing trends.
• Segment results (channel/plan/cohort) before drawing big conclusions from blended averages.
• Use a calculator that references this term (e.g., NRR Calculator) to sanity-check assumptions.
• Read the related guide (e.g., NRR (Net Revenue Retention): definition, formula, how to calculate) for context and common pitfalls.

Where to use this on MetricKit