What Is Revenue Churn?
The percentage of MRR lost from existing customers due to cancellations and downgrades.
The percentage of MRR lost from existing customers due to cancellations and downgrades.
Revenue churn (also called MRR churn) measures the percentage of monthly recurring revenue lost from existing customers. It includes both full cancellations and downgrades.
Revenue churn is generally more meaningful than customer churn because it weights by the value of each customer. Losing one enterprise customer at $10K/month is worse than losing ten SMB customers at $50/month each.
Gross revenue churn excludes expansion revenue, while net revenue churn factors in upgrades. Achieving negative net revenue churn — where expansion outpaces losses — is the goal for top-performing SaaS companies.
Formula
Gross Revenue Churn Rate = (MRR Lost ÷ Starting MRR) × 100
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