Q1 SaaS retention data shows stabilization

How is net dollar retention trending in SaaS? The data shows it has stabilized at ~112%. Below is the net dollar retention of every SaaS company that has IPO’d since October 2017 (62 of the companies are still public). The data shows NDR over the past 9 quarters. 33 of them released net dollar retention data in Q1 2024, the others did not.

Stable NDR. The current median of 112% is strong, but that figure fell from H1 2022 when NDR was over 123%. The average NDR shows similar trends. Note however, we’ve stabilized at ~112% over the past 3 quarters which in our view is a real trend.

Q4 does skew the data slightly. Q4 causes some data inconsistency: in Q4 more companies report than in other quarters as part of their annual filing. 44 companies reported in Q4 whereas 34 reported in Q2 2023 and Q3 2023, and 33 reported in Q1 2024. Those 10 extra companies that don’t typically report are bringing the figures down. If we look at only the 34 companies that reported in Q2 and Q3, then median and average NDR in Q4 of those 34 companies is 113% and 111%.

Other good signs. In Q3 of 2022, median NDR was 123%. Then in Q4 of 2022 it fell hard to 115%. We believe this is because SaaS renewals tend to be much heavier in Q4 than other quarters, so if you’re going to have churn you’ll really see it in Q4. Importantly, we didn’t see a similar drop from Q3 2023 to Q4 2023. It’s another great sign of stability and overall SaaS trends.

Thank you for the readership. Visit blossomstreetventures.com for more blogs and SaaS data. Email the author at sammy@blossomstreetventures.com.