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Net Dollar Retention measures how much recurring revenue you retain and expand from existing customers. Learn how to calculate it, what good looks like, and why it’s a key investor metric.
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Growth is meaningless without retention.
Net Dollar Retention (NDR) measures how effectively your existing customer base expands or contracts over time — a direct signal of product–market fit and customer satisfaction.
Definition:
NDR = (Starting ARR + Expansion – Contraction – Churn) ÷ Starting ARR
Ideal Range:
Recommended Tool: Churn Calculator
Investors love NDR because it reveals the self-sustaining nature of your growth.
If your existing base grows on its own — through upsells and expansions — your business compounds without needing massive acquisition spend.
An NDR >100% means your customers are worth more over time.
An NDR <100% means you’re losing ground even if top-line ARR grows.
Example:
If you start with $1M ARR, gain $250k in expansions, lose $100k to churn, and $50k to downgrades:
[NDR](/glossary#ndr-net-dollar-retention) = (1M + 250k – 100k – 50k) / 1M = 110%
| Stage | Average | Best-in-Class |
|---|---|---|
| Seed / Early | 90–100% | 105%+ |
| Series A | 100–110% | 120%+ |
| Series B | 110–115% | 125%+ |
| Growth (C+) | 115–120% | 130%+ |
Public SaaS leaders (like Snowflake, Datadog, or Atlassian) often sustain NDR above 130% — meaning their base revenue grows 30% every year before new sales.
See: Customer Success Playbook
Remember — NDR tells a story about quality of growth, not just its pace.
Ready to see where your customer retention stands? Take the free Founder Diagnostic.