NDR vs NRR: Net Dollar Retention vs. Net Revenue Retention
Net Dollar Retention (NDR) and Net Revenue Retention (NRR) are two terms frequently thrown around in SaaS boardrooms, investor decks, and S-1 filings. But is there a real difference between the two, or are they just different names for the same metric? This playbook compares NDR and NRR, clarifies the naming conventions, and explains the critical role of Gross Dollar Retention (GDR).
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TL;DR
- Mathematically Identical: NDR and NRR are calculated in exactly the same way: `(Starting ARR + Expansion - Churn - Contraction) / Starting ARR × 100`.
- Naming Conventions: VCs and private startups tend to prefer **NDR** (focusing on the dollar value of contracts), while public companies, underwriters, and SEC filings prefer **NRR** (focusing on the GAAP/annual revenue).
- The Real Difference (Net vs. Gross): NDR and NRR are *net* metrics, meaning expansion masks customer churn. To see the true health of customer cohorts, you must track **Gross Dollar Retention (GDR)** alongside them.
- Benchmarks: A net retention (NDR/NRR) above **100%** indicates a healthy compounding business; **120%+** is best-in-class for enterprise software.
The Calculation: How NDR and NRR Are Built
Both NDR and NRR measure the change in recurring revenue from a cohort of existing customers over a specific period (typically one year). The starting pool of customers acts as the baseline, and any growth (upgrades, usage expansion) or loss (downgrades, churn) is tracked.
The Formula
Where **Ending ARR** is calculated as:
Starting ARR + Expansion ARR - Contraction ARR - Churn ARR
Why Do We Use Different Names?
The naming split is primarily cultural rather than functional:
Net Dollar Retention (NDR)
Preferred by **Venture Capitalists** and **private SaaS founders**. startups focus on contract values expressed in dollars (ACV/TCV) and want to know how many dollars of contracted value compound over time.
Net Revenue Retention (NRR)
Preferred by **Public Markets, Underwriters, and SEC filings**. S-1 registration statements and quarterly earnings reports track GAAP revenue, and thus refer to the metric as Net *Revenue* Retention.
The Real Metric to Watch: Net vs. Gross Retention
While NDR/NRR tells you how your revenue is compounding, it can hide a significant customer churn problem. Because it is a *net* metric, you can achieve a healthy 110% NRR even if you are losing 20% of your customer base annually, provided that the remaining 80% expand their spend by 30%.
To see if you have a product-market fit or customer retention problem, you must track **Gross Dollar Retention (GDR)**:
Gross Dollar Retention (GDR) Formula
*Note: GDR can never exceed 100% because it excludes expansion revenue completely. It is a pure measure of base erosion.*
A high NDR (e.g., 115%) combined with a low GDR (e.g., 75%) indicates that you have a **highly leaky bucket** but are hiding it with large upgrades from your largest accounts. This is highly risky because your expansion pool will eventually saturate.
Public NRR Benchmarks
Public SaaS companies disclose NRR in their earnings calls. Best-in-class database and developer infrastructure companies regularly post NRR figures above 120%, while vertical-focused and mid-market SaaS companies target 100–110%.
To see the full leaderboard of how public SaaS companies rank, browse our live SaaS NRR Leaderboard, updated daily from SEC filings.
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Ara Housepian
Founder & Lead SaaS Analyst, Araho Digital
Ara is the founder of Araho Digital and SaaSDB. He has spent over a decade in software development, SaaS operating metrics modeling, and investment data analysis. Ara holds a degree in Computer Science and focuses on building financial tooling and data pipelines that make institutional-grade SaaS benchmarking accessible to growth operators.
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SaaSDB (2026). NDR vs NRR: Net Dollar Retention vs. Net Revenue Retention (2026). Retrieved 2026-05-27 from https://saasdb.app/learn/operators/ndr-vs-nrr/<a href="https://saasdb.app/learn/operators/ndr-vs-nrr/">NDR vs NRR: Net Dollar Retention vs. Net Revenue Retention (2026) — SaaSDB</a>[NDR vs NRR: Net Dollar Retention vs. Net Revenue Retention (2026)](https://saasdb.app/learn/operators/ndr-vs-nrr/)