Chart: Net MRR Churn Rate
The Net MRR Churn Rate chart tracks the percentage of recurring revenue lost through contraction and churn, offset by expansion and reactivation revenue from existing customers.
For SaaS businesses, it’s a more nuanced signal than gross MRR churn rate because if your existing customers are upgrading or returning after canceling, that revenue can compensate for losses.
Ideally, this metric should be negative, meaning expansion outpaces churn entirely. Monitoring it over time helps you assess the health of your revenue base, reduce dependency on new customer acquisition, and build more predictable, sustainable growth.
To view the rate of total revenue lost, use Gross MRR Churn Rate.
What is a good net MRR churn rate?
To grow a SaaS business, it’s ideal to have a negative net MRR churn rate, as this means you’re gaining more through expansion than losing through contraction and cancellations. Growing your revenue from existing customers typically means you’ll spend less compared to the cost of acquiring brand new subscribers.
Learn more about churn and benchmark your business’s performance on our blog.
Chart Notes
- Familiarize yourself with the Churn Rate Formula and Churn Recognition settings in ChartMogul and make sure you’ve configured these to support your needs.
- Review how ChartMogul handles contraction and churn in the lifecycle of a subscription.
- Non-recurring payments do not contribute to this chart.
- When filtering by Plan > is one of, ChartMogul calculates the percentage of revenue lost when a subscriber switches plans. When the plan switch results in expansion, ChartMogul reports it as 0% of revenue churned. When the plan switch results in contraction, ChartMogul calculates the percentage of revenue lost from the subscription.
- Toggle between the default (WoW/MoM/QoQ) and year-over-year (YoY) rates. Learn more.
- Select Exclude reactivations from numerator to remove reactivated subscriptions from your churn calculation. Note: this will raise your churn numbers. This option is not available when using the Shopify formula.
- Select Exclude MRR contraction from numerator to remove contraction MRR from your churn calculation. Note: this will lower your churn numbers. This option is not available when using the Shopify formula.
- When a plan filter is applied, use the Subscribers leaving the segment drop-down to control how plan switches are counted—as full churn, proportional churn, or excluded from the calculation entirely. This option is not available when using the Shopify formula.
Calculation
On August 15, 2022 we retired the Churn Rate Formula setting. Accounts opened prior to this date that had selected the Shopify formula can continue to configure this setting. All other accounts, including new accounts opened on or after August 15, 2022 use the standard formula.
Standard Formula (B2B)
Formula
Selecting Exclude reactivations from numerator removes Reactivation MRR from the formula. This will raise your churn numbers.
Selecting Exclude MRR contraction from numerator removes Contraction MRR from the formula. This will lower your churn numbers.
When a plan filter is applied, the Subscribers leaving the segment drop-down controls how subscribers who switch away from the filtered plan affect the formula:
| Option | How plan switches are counted | Formula |
|---|---|---|
| 100% revenue churn | The full MRR of subscribers who switched away is added to the churn total. | (Churn MRR + Contraction MRR + MRR Leaving Segment − Expansion MRR − Reactivation MRR) ÷ Starting MRR |
| Proportional revenue retention | Upgrades out are treated as 0% churned; only the MRR difference lost on a downgrade is added to the churn total (e.g., the $40 difference in a $100 to $60 switch, not the full $100). | (Churn MRR + Contraction MRR + Contraction Left MRR − Expansion MRR − Reactivation MRR) ÷ Starting MRR |
| Excluded from numerator (100% retention) | Subscribers leaving the segment are ignored entirely; the formula is unchanged. | (Churn MRR + Contraction MRR − Expansion MRR − Reactivation MRR) ÷ Starting MRR |
Example
At the start of the month, you have $100 in MRR. During the month, you lose $10 to churn and $10 to contraction, while one customer increases their MRR by $10. Your net MRR churn rate is 10%: (($10 + $10) − ($10 + $0)) ÷ $100.
Shopify Formula (B2C)
Formula
Example
You have $100 in MRR at the start of the day and $120 in MRR at the end of the day. $10 of the growth in MRR came from new business. Your net MRR churn rate is −10%: 1 − ((120 − 10) ÷ 100)).
Churn rate for the current period
When calculating churn rate for a period that hasn’t ended yet, ChartMogul uses the following formula to estimate churn rate at the end of the period:
(total number of days in the period ÷ number of days passed in the period) × real churn rate
Chart Data
The Chart Data table for Net MRR Retention works differently from other charts. It provides the following breakdown:
- Starting MRR – The MRR at the start of each period.
- Contraction MRR – The loss in MRR from subscribers who had a net decrease in MRR. Hidden when Exclude MRR contraction from numerator is selected.
- Churn MRR – The net loss of MRR from existing customers who canceled their last (or only) subscription in the period.
- Reactivation MRR – The net gain in MRR from customers who reactivated in the period. Hidden when Exclude reactivations from numerator is selected.
- MRR Entering Segment – Total MRR of the subscriptions before they transitioned into the segment. Only visible when a plan filter is applied.
- MRR Leaving Segment – Total MRR of the subscriptions before they transitioned out of the segment. Only visible when a plan filter is applied. Expand the row to reveal:
- Expansions out of segment – MRR lost when subscribers upgrade to a plan outside the filtered segment.
- Contractions out of segment – MRR lost when subscribers downgrade to a plan outside the filtered segment.
- Net MRR churn rate — The percentage value of net MRR churned in the period.
Next Steps
- Learn more about other churn rate charts.
- See which subscriptions are scheduled to churn with CMRR.
- What is Churn? How Can It Be Negative? And What’s a Good Monthly Churn Rate?
- Net vs. Gross Revenue Churn: Best Practices