Churn Rate Calculator

Formula

• customer churn = customers lost ÷ customers at start of period
• gross revenue churn = MRR lost ÷ MRR at start of period
• net revenue churn = (MRR lost − expansion MRR) ÷ MRR at start
• net revenue retention = (starting MRR − churned + expansion) ÷ starting MRR
• annualised churn = 1 − (1 − monthly churn)^12
• average lifetime (months) = 1 ÷ monthly churn rate

Methodology

Customer churn counts logos; revenue churn counts dollars. They diverge when your smallest customers leave most often — you can lose 5% of customers and only 1% of revenue, which is a much healthier position than the reverse.

Net revenue churn subtracts expansion from existing accounts. When expansion exceeds churn, net revenue churn is negative and net revenue retention exceeds 100% — the holy grail, because revenue grows even with zero new customers.

Annualised churn is compounded, not multiplied. 3% monthly churn is 30.6% a year, not 36%, because each month's loss applies to a smaller base.

These are modelling estimates based on standard SaaS metric definitions. Real results depend on your billing data, contract terms and accounting treatment, so reconcile against your finance system before reporting numbers externally.

Example calculation

1. A company starts the month with 220 customers and $10,453 MRR, and loses 8 customers worth $600.
2. Customer churn: 8 ÷ 220 = 3.64% monthly, which compounds to about 35.8% a year.
3. Gross revenue churn: $600 ÷ $10,453 = 5.74%.
4. With $900 of expansion, net revenue churn is ($600 − $900) ÷ $10,453 = −2.87%, so net revenue retention is 102.9%.

Frequently asked questions