WHAT IS NRR? Net Revenue Reten琀椀on (NRR), also referred to as Net Dollar Reten琀椀on (NDR), is a measure of how much revenue growth comes from the exis琀椀ng customer base. In other words, if a company won no new customers what would happen to its revenue? Many SaaS companies are able to grow their revenues without adding new customers. This is a very powerful business model. For Q1 of FY2024 Snow昀氀ake reported NRR of 151 and in the past has reported NRR as high as 171. In other words, Snow昀氀ake will grow at more than 50% per year without adding any new customers. Investors have been focusing on NRR performance for the past few years and looking for companies that can reliably deliver NRR over 130. For SnowFlake to deliver NRR of 151 in Q1 FY 2023 is astonishing for a company at its scale. HubSpot has seen NRR contract from 110 in Q1 2022 to 104 in Q1 2023. Hubspot is of course signi昀椀cantly larger and is focused on Small and Medium Businesses. The Average Contract Value for HubSpot is about $11,400. Similarly, Freshworks has seen NRR contract from 115 to Table 1: Snow昀氀ake NRR 107 in the same period. We will look at the rela琀椀onship between NRR performance and the size of businesses targeted in the survey analysis. PeakSpan & Ibbaka Net Revenue Reten琀椀on Research Report September 2023 7
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