Explainer: What net dollar retention tells you about an ad tech or SaaS company
· 45m ago · Originally reported by PPC Land
Net dollar retention measures how much recurring revenue a company keeps and grows from its existing customer base over a year, before counting new customers. The piece walks through how the metric is calculated, how it can be stretched or gamed, and how to interpret it when evaluating vendors.
Why it matters
Investors and buyers use NDR to judge whether a company's product keeps customers and grows with them, which is a key signal when picking ad tech partners or valuing programmatic firms.
Explain it like I’m new here
It's like checking whether a lemonade stand's regular customers are buying more lemonade each year — not whether new kids showed up.
Terms in this story
Net revenue retention
Net revenue retention (NRR) is the percentage of revenue a company keeps from an existing group of customers over a period, including expansions, downgrades and losses, but excluding new customers.
Ad tech
Ad tech is the software and infrastructure that decides which ad appears where, buys and sells that ad space, delivers the ad, and measures what happened afterwards.
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