Calculate net dollar retention rate to measure revenue retention from existing customers. Track expansion, contraction, and churn in a waterfall view.
Net Dollar Retention (NDR), also known as Net Revenue Retention (NRR), measures how much revenue a company retains and grows from its existing customer base over a given period. It includes the effects of expansion (upsells, cross-sells), contraction (downgrades), and churn (cancellations). An NDR above 100% means existing customers are generating more revenue over time, even before counting new customer acquisition.
NDR is widely considered the single most important SaaS metric because it reflects both product value and customer satisfaction. Companies with NDR above 120% are growing their revenue from existing customers alone by 20% annually — new customer acquisition is additive on top. Top public SaaS companies like Snowflake, Twilio, and Datadog have achieved NDR rates of 130–170%.
This calculator computes your NDR, visualizes the revenue waterfall from starting ARR to ending ARR (for existing customers only), benchmarks your result, and projects multi-year revenue impact of different NDR levels. Understanding NDR helps you prioritize product development, customer success, and expansion strategies.
NDR reveals the true health of your customer relationships. Unlike gross retention, which only captures losses, NDR shows whether your existing customer base is a growth engine or a leaking bucket. This calculator gives you an instant NDR score, a visual revenue waterfall, and models what different NDR levels mean for long-term revenue compounding.
Net Dollar Retention (%) = (Starting ARR + Expansion − Contraction − Churn) ÷ Starting ARR × 100 Gross Dollar Retention (%) = (Starting ARR − Contraction − Churn) ÷ Starting ARR × 100 Expansion Rate (%) = Expansion ARR ÷ Starting ARR × 100
Result: NDR = 107.0%
Starting with $10M ARR, adding $2M from expansion, losing $500K to contraction and $800K to churn, the ending ARR from existing customers is $10.7M. NDR = ($10M + $2M − $0.5M − $0.8M) ÷ $10M × 100 = 107.0%. This means existing customers are generating 7% more revenue year over year without counting any new customer acquisition.
Net dollar retention above 100% creates a compounding revenue engine. If your NDR is 110%, last year's $10M cohort becomes $11M this year, $12.1M next year, and $13.3M the year after — all without acquiring a single new customer. This compounding effect is why investors consider NDR the most important SaaS metric. A 10-percentage-point improvement in NDR can be worth more than a 20% increase in new customer acquisition.
Breaking NDR into its components provides actionable insights. If churn is the primary drag, invest in customer success and product improvements. If contraction dominates, re-evaluate pricing tiers and packaging to better match customer value. If expansion is low despite good retention, focus on upselling motions, usage triggers, and product features that encourage growth.
The most sophisticated teams track NDR by customer cohort (month or quarter of acquisition). This reveals whether newer cohorts retain and expand at different rates than older ones. Improving cohort NDR over time signals that product-market fit and customer success processes are maturing.
For SMB-focused SaaS, NDR of 90–100% is acceptable. For mid-market, 100–110% is good. For enterprise SaaS, 110–130%+ is the target. Top-performing public SaaS companies often report NDR of 120–170%. Any NDR above 100% means your existing customer base is growing without new customer acquisition.
Gross dollar retention (GDR) excludes expansion revenue and only measures losses: (Starting ARR − Contraction − Churn) ÷ Starting ARR. It can never exceed 100%. NDR includes expansion and can exceed 100%. GDR shows your floor (how well you retain), while NDR shows the net effect including growth.
NDR is one of the strongest predictors of SaaS company valuation. Companies with NDR above 120% trade at significantly higher revenue multiples than those below 100%. Investors prize high NDR because it demonstrates product-market fit, strong expansion potential, and predictable revenue growth.
Extremely high NDR (>150%) may indicate rapid price increases or land-and-expand models that could eventually plateau. While high NDR is generally positive, it's important to understand the drivers. Sustainable high NDR comes from genuine value delivery and usage growth, not just pricing leverage.
Improve NDR by reducing churn through better onboarding and customer success, reducing contraction through value-aligned pricing, and increasing expansion through upselling, cross-selling, and usage-based pricing tiers. Product improvements that increase engagement naturally drive higher expansion rates.
Both are useful. Monthly NDR provides operational insight for quick action. Annual NDR is better for trend analysis and investor communication. When reporting annual NDR, you can either annualize a recent month or calculate the trailing 12-month period. Be consistent in your methodology.