Net dollar retention (NDR) is a metric used to measure the retention of revenue in a subscription-based business. It is calculated by taking the dollar value of revenue from existing customers in a given period, subtracting the revenue lost from cancelled or churned customers, and dividing the result by the beginning-of-period revenue from those same customers.
NDR is typically expressed as a percentage, with a higher percentage indicating better retention. It’s a key metric in understanding the long-term health of a SaaS business.
