Contracted Net Dollar Retention

What it measures

The net dollar movement in your existing customers' contracted recurring revenue over a period — churn and downgrades pulling down, upsells and price increases pushing up — expressed as a percentage of where that base started. New logos are excluded entirely. Because it runs on contracted revenue (CARR), which represents signed commitments not yet fully recognized on the income statement, CNDR above 100% means the contract book you already had grew on its own; below 100% means it shrank.

Why it matters

CNDR separates the expansion and retention health of your existing contract book from new sales. It is forward-looking: contracted revenue is committed before it lands on the P&L, so a move in CNDR signals future recognized revenue and cash from the existing base before it shows up in earnings. It is dollar-weighted, so losing one $100K customer hurts it far more than losing ten $1K customers — exactly the signal you want. Finance forecasts retention risk off it, sales reads it as the durability of the book, and CS and product live by it because it is the cleanest proxy for whether customers are getting expanding value. High CNDR is the compounding engine behind land-and-expand: the bookings base grows even before a single new logo signs.

How to read it

Read CNDR as a trend, not a snapshot, and always alongside Contracted Gross Dollar Retention. CNDR of 115% means your contracted base grew 15% from existing customers alone; 100% is flat; below 100% is shrinking. The gap between CNDR and Contracted Gross Dollar Retention (CGDR) is your net expansion — if CNDR is 115% but CGDR is 85%, upsells are masking a base that is leaking 15% to churn and downgrades, and you need to fix retention even while the headline looks healthy. Watch the month-over-month direction: a CNDR of 115% that was 125% last month is decelerating expansion or accelerating losses, regardless of how good the absolute number reads. Always compare to the prior period, the same period last year, and your plan.

What good looks like

Watch-outs

• Letting new-logo CARR touch the numerator. CNDR counts only movement in the opening contract cohort — upgrades, downgrades, and cancellations of existing customers. If a single dollar of new bookings leaks into Upsell CARR, you overstate expansion from the base and lose the ability to separate base health from acquisition.
• Treating the absolute CNDR number as the story. A CNDR of 110% last month versus 120% this month is a 10-point deceleration that the 110% headline flatters — expansion is slowing or churn is accelerating. Track the month-over-month and quarter-over-quarter trend obsessively, not the snapshot.
• Reading CNDR without Contracted Gross Dollar Retention. A high CNDR can sit on top of a leaking base: 115% CNDR with 85% CGDR means upsells are papering over 15% of the base lost to churn and downgrades. Always report the two together so the leak is visible.
• Ignoring customer concentration in contracted expansion. One whale's $5M upsell can lift CNDR to 125% while making that account 30% of the contract book and raising concentration risk. Segment CNDR by customer size, cohort, and territory to see where expansion is broad versus lopsided.
• Naively annualizing a monthly rate. Retention compounds: a monthly CNDR of 95% sustained for a year (0.95^12) annualizes to roughly 54% of the contracted base, not 95% minus a little — a small monthly miss becomes a large annual hole.

Worked example