This Key Metric Is Slumping for Cloudflare -- Here's How the Company Plans To Fix It
A major source of growth for Cloudflare (NYSE: NET) comes from its existing customer base. By convincing customers to increase usage and pay for additional products, the company can grow relationships while lowering the likelihood those customers will consider switching providers.
The dollar-based net retention rate is a key metric that measures how much existing customers are growing spending over time. A retention rate of 100% means that spending has remained the same, while anything above 100% indicates customers are increasing their spending on average.
Cloudflare's dollar-based net retention rate dipped to 122% in the fourth quarter of 2022, marking the third consecutive quarter that rate has declined on a sequential basis. This isn't a bad number in absolute terms, but the company aims to increase it to 130% over time. Here's its plan.
Source Fool.com
