Net Dollar Retention: What 120% Actually Means
The metric is real. The way it is reported is frequently not.
MT
Marcus ThorneContributor, The Signal
NDR is the most reliably impressive metric a SaaS company can report and one of the easiest to massage in ways that survive a board meeting and fail in a diligence process. The questions that matter: is the cohort definition stable? Are price increases doing the work? Is the calculation gross of churn or net? Are services and one-time revenues mixed in?
A clean, narrow, gross-of-expansion NDR above 110% is a powerful signal. A blended figure above 130% is usually doing a lot of work it should not be doing.