---
title: Net Dollar Retention (NDR): Formula & SaaS Benchmarks
description: Net dollar retention (NDR) formula: starting revenue + expansion − contraction − churn, divided by starting revenue. Worked example and 2026 median: 102%.
canonical: https://www.scalexp.com/saas-metrics-library/net-dollar-retention/
---
# Net Dollar Retention: Calculation, Benchmarks & Improvement Guide

Understand net dollar retention, calculate it with your own numbers, see how it benchmarks against other SaaS companies, and get practical tips to improve it.

This article will provide

- Calculation
- Benchmarks
- Improvement

Net Dollar Retention is used to measure growth in revenue from existing customers. It can also be called Net Revenue Retention. Common abbreviations are NDR or NRR.

**How to calculate net revenue retention in three steps:**

1. Take the MRR from existing customers at the start of the period, for example $100,000. Leave out customers acquired during the period.
2. Add expansion, then subtract contraction and churn from those same customers: $100,000 + $15,000 − $5,000 − $8,000 = $102,000.
3. Divide the result by the starting MRR and multiply by 100%: $102,000 / $100,000 = **102%** net revenue retention.

## On this page

1. How is Net Dollar Retention calculated?
2. Try it with your numbers
3. How your result compares
4. Net Dollar Retention vs Gross Revenue Retention
5. How SaaS companies use NDR
6. What is a good NDR result?
7. What are the NDR benchmarks in 2026?
8. NDR visualization example
9. Frequently asked questions

## How is Net Dollar Retention calculated?

To calculate net dollar retention, split revenue or MRR into upsells, downgrades and losses.

- **Upsells** are extra revenue from current customers — higher price tiers, or more seats.
- **Lost MRR** is the monthly value of revenue from [customers who churn](https://www.scalexp.com/saas-metrics-library/customer-churn/).
- **Downgrades** are reductions from current customers: added discounts, fewer seats, or lower price tiers.

NDR is usually expressed as an annual percentage, using the year’s total upsells, downgrades and lost contracts.

The formula is:

![Diagram illustrating the formula for calculating Net Dollar Retention with MRR components.](https://www.scalexp.com/wp-content/uploads/2024/05/net-dollar-retention-2-1024x435.png)

If splitting out upsells, losses and downgrades is too fiddly, use total revenue instead. Isolate revenue from current customers and exclude anyone recently acquired.

An example. A software company has 100 customers who generated $10,000 in Q1 2022. The same customers generated $9,000 in Q4 2021.

Net dollar retention = ($10,000 / $9,000) x 100% = **111.1%**.

That means the business grew revenue from those customers by 11.1% over the previous period.

The same measure, split into its movements over one year: a cohort of customers starts the year at $100,000 of MRR. Across the year those customers add $15,000 through upgrades and extra seats, reduce spend by $5,000 through downgrades, and $8,000 is lost to churn.

Net dollar retention = ($100,000 + $15,000 − $5,000 − $8,000) / $100,000 = **102%**. Gross revenue retention, which leaves out the $15,000 of expansion, is 87%.

To convert a monthly figure into an annual rate, take it to the power of twelve. The formula below shows this.

![annualized net dollar retention equals the sum of MMR from upsells/expansions in the month less MRR from lost and downgraded contracts in the month, all divided by MRR 1 month ago. Add one, then take the result to the power of 12. This equals annualized net dollar retention.](https://www.scalexp.com/wp-content/uploads/2024/05/annualised-net-dollar-retention-1024x435.png)

## How your result compares

### Get the 2026 SaaS benchmark report

Definitions, formulas, and this year’s median and top-quartile numbers for all 20 metrics in the library. One PDF you can take straight into your next board meeting.

See our [privacy policy](https://www.scalexp.com/privacy-policy/).

## Net Dollar Retention vs Gross Revenue Retention

Gross Revenue Retention (GRR) excludes upsells and expansion. It measures only revenue lost to churn and downgrades, which is why GRR can never exceed 100% while NDR can.

The two answer different questions. NDR tells you whether the existing customer base is growing overall. GRR tells you how much of it you are keeping before expansion is counted.

Read together they separate genuine retention from expansion masking churn. For the full side-by-side, see [gross revenue retention vs net revenue retention](https://www.scalexp.com/saas-metrics-library/gross-net-revenue-retention/).

## How SaaS companies use NDR

Net Dollar Retention is an [important metric for subscription businesses](https://www.scalexp.com/saas-metrics/). It shows how well you retain and grow revenue from customers you already have.

It is widely benchmarked and frequently used in valuations.

## What is a good NDR result?

NDR varies widely by business and by customer group. Compare it internally first, tracking the trend across recent months or quarters.

NDR should rise over time, ideally above 100% on an annual basis.

A low or falling NDR suggests you are losing customers, or failing to upsell and cross-sell to the ones you have.

## What are the NDR benchmarks in 2026?

How easily you can raise NDR depends on who you sell to. It is consistently harder with smaller customers and consumers than with large organizations.

The current figures, across 342 B2B SaaS companies, are below — and they are best read alongside gross retention rather than alone.

NDR at 102% reads as a healthy, growing customer base. Underneath it, **gross retention fell from 88% to 84%**. Customers are leaving faster than they were, and expansion revenue is covering the difference. **An eighteen-point gap is the market telling you to report both numbers**, because one of them is moving in the wrong direction.

### Retention by go-to-market motion

| Motion | Median gross retention |
|---|---|
| Sales-led | 88% |
| Hybrid | 80% |
| Product-led | 79% |

Nine points separate sales-led from product-led. Self-serve customers arrive cheaply and leave easily, which is the trade the model makes.

### And by contract value and growth

| Cohort | Median gross retention |
|---|---|
| Enterprise ($50K–$100K ACV) | 91% |
| Sub-$5K ACV | 80% |
| Growing 11–20% | 89% |
| Growing under 10% | 79% |

Retention and growth move together. The slowest-growing cohort also retains worst, ten points below companies growing 11–20% — churn and stalled growth are usually the same problem seen from two angles.

Source: 2026 Aleph × Benchmarkit SaaS & AI Performance Benchmarks, published 1 June 2026, full-year 2025 actuals from 342 B2B SaaS and AI-native companies (226 reported gross retention).

Measure growth from existing customers

## Know whether your customer base is growing itself.

ScaleXP tracks expansion, downgrades and churn across the same customer cohort. See whether existing customers are creating growth—or whether new sales are compensating for an underlying retention problem.

Build net dollar retention from the individual customer movements behind the percentage.

Example connected NDR view

- **Starting customer MRR:** $100,000
- **Movements:** Expansion, contraction and churn

Starting customer MRR

$100,000

Recurring revenue from the opening customer cohort before any subsequent movement.

Illustrative example figures, not your live data.

Expansion can hide churn for a long time. ScaleXP calculates net and gross retention side by side from your billing data, by cohort and segment, so the gap is visible before it becomes a board question.

![Table displaying Net Dollar Retention formula with target customer segments and their employee counts.](https://www.scalexp.com/wp-content/uploads/2023/02/Net-Dollar-Retention-formula-1024x401.png)

## NDR visualization example

![Bar chart illustrating net dollar retention metrics over a 12-month period with upgrades, losses, and downgrades.](https://www.scalexp.com/wp-content/uploads/2023/02/Net-Dollar-Retention-1024x672.png)

ScaleXP fully automates Net Dollar Retention. Through a series of smart algorithms, the system will classify your revenue into New, Lost, Upsells and Downgrades. These algorithms make it easy to [fully automate both revenue recognition](https://www.scalexp.com/revenue-recognition/) and critical SaaS metrics. [See how ScaleXP automates SaaS metrics](https://www.scalexp.com/saas-metrics/).

## Frequently asked questions

### Is net dollar retention the same as net revenue retention?

Yes, net dollar retention (NDR) and net revenue retention (NRR) are two names for the same metric: the share of recurring revenue kept from existing customers after expansion, downgrades and churn. The 2026 median NDR for B2B SaaS is 102%, while median gross retention is 84%, an 18-point gap filled by expansion. Investors therefore ask for both numbers. ScaleXP calculates net dollar retention and gross revenue retention automatically from accounting and CRM data, so finance teams report both consistently every month.

### Can ScaleXP calculate net dollar retention automatically from Xero and HubSpot?

Yes, ScaleXP calculates net dollar retention automatically from invoices in Xero or QuickBooks Online and customer data in HubSpot, Salesforce or Pipedrive. Every revenue movement is classified as new, lost, upsell or downgrade, so NDR is built from the same detail finance already trusts. ScaleXP prepares NDR daily alongside 30+ other SaaS metrics, including GRR and churn. Finance teams stop calculating NDR by hand and get a figure ready for every board meeting and investor update.

### How does ScaleXP keep NDR consistent with the financial statements?

ScaleXP keeps NDR consistent with the financial statements because the beginning and ending recurring revenue both come from invoices and journals in Xero or QuickBooks. Expansion, contraction and churn are derived from billing data, not from CRM fields alone, so net dollar retention reconciles to the revenue in the management accounts. Finance controls how upgrades, downgrades and reactivations are classified. Boards and investors get a net retention figure that is finance-grade, traceable and ready for due diligence.

### How does ScaleXP report net dollar retention to investors?

ScaleXP reports net dollar retention in live dashboards and PowerPoint board packs, side by side with gross revenue retention and broken down by cohort and segment. In presentation mode, directors can drill down to the customers driving expansion or churn. Estiaan, Finance Manager at Cue Technology, says: “It’s allowed me to provide our directors and potential investors with real-time information on our SaaS metrics.” Finance teams give investors an NDR story that explains itself.

For Xero, QuickBooks and Zoho Books

## Make net retention explain itself.

ScaleXP calculates NDR from the customer and revenue movements beneath it. Drill from the board-level percentage into the expansion, contraction and churn that created the result.

From customer movements to finance-grade NDR

ScaleXP joins recurring revenue to the customers and contracts behind it.

Related metrics[gross and net revenue retention](https://www.scalexp.com/saas-metrics-library/gross-net-revenue-retention/)[revenue churn](https://www.scalexp.com/saas-metrics-library/revenue-churn/)[customer retention rate](https://www.scalexp.com/saas-metrics-library/customer-retention-rate/)[MRR growth rate](https://www.scalexp.com/saas-metrics-library/mrr-growth-rate/)

## You may also be interested in

![Graph depicting growth with a dollar sign and upward trend line.](https://www.scalexp.com/wp-content/uploads/2023/01/Group-100mrr-growth.png)

## MRR Growth Rate

Percentage increase in MRR over a certain period of time, most typically a quarter or a year.

[MRR Growth Rate →](https://www.scalexp.com/saas-metrics-library/mrr-growth-rate/)

![Graphic representation of the Rule of 40 concept in SaaS metrics, featuring the number 40 in blue.](https://www.scalexp.com/wp-content/uploads/2023/02/SAAS-Rule-of-40.png)

## Rule of 40

Measures the growth and profitability of a subscription business. Calculated as annual revenue growth rate plus EBITDA margin.

[Rule of 40 →](https://www.scalexp.com/saas-metrics-library/rule-of-40/)

![Graphic of blue circular arrows surrounding a dollar sign, representing financial concepts.](https://www.scalexp.com/wp-content/uploads/2023/02/CMRR.png)

## CMRR

A forward-looking view of MRR, usually MRR plus new bookings, less churn.

[CMRR →](https://www.scalexp.com/saas-metrics-library/committed-monthly-recurring-revenue/)

## SAAS METRICS LIBRARY

Read about more SaaS metrics, from ARR to Rule of 40.

[View all metrics →](https://www.scalexp.com/saas-metrics-library/)