So Jamin Ball of Altimeter had a great summary of public company NRR here:

On the one hand, NRR has fallen every quarter since Q4’22, and is now materially lower than Q1’20 (pre-Covid).  That’s not great.

On the other hand, it’s still over 110% across the board.  That means at a higher level, the engine of 100%+ NRR for almost all public SaaS companies is still working.  Even 110% NRR is magical.  It’s just not quite as magical as 120% 🙂

You can see it for example in Snowflake’s latest numbers.  NRR there has fallen from jaw-dropping (170%) to merely epic (130%):

The root cause in some cases is certainly churn, but for many of us in B2B SaaS, it’s more contraction.  Customers cutting the number of seats, and trying to manage spend.  A deep dive on that with Henry Schuck the CEO of ZoomInfo here:

The bottom line is on the one hand, everything is a lot harder with NRR down -10% across the board.   It’s not just harder than 2021, it’s harder than 2020 and 2022, too.  Upsells are harder, contraction is up.

But on the other hand, go long.  Ultimately in SaaS, customers keep buying more from you each year than the last one, on average.  If you do it right.  If you really invest in them.

There may be a tough year or two, but the trend of 100%+ NRR in SaaS remains real.

Invest in it.

A related post here:

High NRR Can Scale Infinitely. Invest More There.

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