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516 The Funny Math Behind a Key Software Metric

The Information
Anita Ramaswamy @ The Information · 08/22/2025 10:31 EDT

The Funny Math Behind a Key Software Metric

The rise of artificial intelligence has turned the software industry into a minefield for investors. To address the risks, some are relying more on a metric known as net revenue retention to pick winners and avoid losers.

In its simplest form, NRR, also known as net dollar retention, compares annual revenue from a year ago to now. The number can be useful, with one big caveat. There is no set definition of NRR, and a survey of high-scoring companies shows that they calculate the metric in different ways, o

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