Contracted Net Dollar Retention
The percentage of opening contracted annual recurring revenue you retain and expand from existing customers over a period, including churn, downgrades, and upsells — calculated on contracted revenue not yet recognized on the income statement.
◆ Percentage
Formula
Built from
What it measures
The net dollar movement in your existing customers' contracted revenue commitments over a period — measuring the waterfall of churn, downgrades, and upsells — expressed as a percentage of your opening contracted annual recurring revenue. CNDR is calculated on contracted revenue (CARR), which represents signed customer contracts not yet recognized on the income statement, making it a leading indicator of future recognized revenue and cash flow from the existing base.
Why it matters
CNDR separates the expansion and retention health of your contract book from new sales. It is the most forward-looking retention metric because contracted revenue hasn't hit the P&L yet — improvements in CNDR signal future revenue and cash improvements before they appear in quarterly earnings. Sales and finance use CNDR as the leading indicator of whether the company is adding durability (CNDR > 100%) or eroding it (CNDR < 100%). High CNDR is the compounding engine of SaaS: you grow the bookings base even before new logos sign. Customer success and product obsess over CNDR because it reflects whether customers are getting expanding value — the foundation of land-and-expand businesses.
How to read it
Read CNDR as a trend, never as a snapshot, and always alongside Gross Contracted Revenue 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 Gross Contracted Revenue Retention (GCRR) is your contracted net expansion rate — if CNDR is 115% but GCRR is 80%, upsells are masking that 20% of contracted revenue is leaking from churn and downgrades, a leading warning sign. Watch the month-over-month direction obsessively: CNDR of 115% that was 125% last month is decelerating expansion or accelerating losses, regardless of how the 115% absolute number reads. Compare to the same period last year and to your plan forecast.
What good looks like
Good
CNDR above 100% — your contracted base is expanding faster than it churns, signaling strong expansion motion and customer stickiness. At this level, you grow the base from existing contracts alone.
Watch
CNDR hovering just above 100% — the contracted base is growing only modestly month-over-month. Check whether upsell velocity is slowing, churn is accelerating, or downgrades are rising in frequency before the buffer disappears.
Bad
CNDR below 100% — your contracted base is shrinking, a leading indicator that future cash and revenue will decline unless new bookings accelerate. Address churn root causes and expansion mechanics quickly.
Watch-outs
- Comparing CNDR directly to live NRR and drawing wrong conclusions. CNDR and NRR measure the same motion (existing customer retention and expansion) but on different revenue bases (contracted vs. live). A company can have 110% CNDR but 95% NRR because of refunds, deferrals, or recognition timing mismatches. Always look at both to understand where cash and revenue are truly flowing.
- Treating the absolute CNDR number as the story. 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.
- Ignoring customer concentration in contracted expansion. One whale's $5M upsell can lift CNDR to 125% while making that account 30% of your contract book and reducing your safety margin against concentration risk. Segment CNDR by customer size, cohort, and territory to see where expansion is real versus lopsided.
- Allowing new-logo CARR to touch CNDR math. If a new contract's CARR leaks into the upsell numerator, you overstate expansion from existing customers and lose the ability to separate base health from acquisition. CNDR is only existing customer amendments and cancellations, never new bookings.
Worked example
Hypothetical
You open June with $2M in CARR. During June, three customers churn for $300K total, two downgrade for $100K, and two upgrade and accept price increases for $400K. Net Contracted Dollar Retention is ($2M + $400K − $100K − $300K) ÷ $2M = $2M ÷ $2M = 100% — your contracted base is flat. Had upgrades been only $200K instead, CNDR would be ($2M + $200K − $100K − $300K) ÷ $2M = $1.8M ÷ $2M = 90%, signaling the contract base is eroding.
Variants & windows
The same metric re-expressed by a mechanical transform — a trailing window, a growth rate, a per-unit scaling, or a book/segment cut. Each is computed from Contracted Net Dollar Retention above.
- Contracted NRC (MOM) Alternate cut of the parent metric
- Contracted NRC (T3M) Trailing 3-month
- Contracted NRC (TTM) Trailing 12-month
- Contracted NRR Growth Rate (MOM) Growth rate
- Contracted NRR (T3M) Trailing 3-month
- Contracted NRR Growth Rate (T3M) Growth rate · Trailing 3-month
- Contracted NRR (TTM) Trailing 12-month
- Contracted NRR Growth Rate (TTM) Growth rate · Trailing 12-month