A chart that is sloping upwards and to the right is what you want as it means your cohorts are a source of revenue growth (you are expanding bookings within the existing customer base), and the steeper the slope the better. Additionally, upward sloping cohorts mean net dollar retention is in excess of 100%, which is where you want it. For instance, at IPO Datadog had net dollar retention of 146%, which is remarkable; net dollar retention is the difference between the ARR of a customer cohort when you first acquired them and ARR at some point in the future, usually 1 year later.
Examples of cohort performance from the prospectus’ of Cloudflare, Datadog, Livongo, and Blend are below. Commentary is their prospectus’ (S1).
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