NDR (Net Dollar Retention)

Measured as

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

Misused when

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

Operator takeaway

• 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.
• Keep NDR (Net Dollar Retention) consistent by cohort, segment, and period before you use it as a decision signal in planning or reporting.
• Interpret the metric alongside retention, margin, or payback so one ratio does not hide the real operating trade-off.

Next decision

• Quantify the impact with NRR Calculator if you need to turn the definition into an operating assumption.
• Read NRR (Net Revenue Retention): definition, formula, how to calculate if the decision depends on interpretation, policy, or trade-offs beyond the raw formula.