Cohort: MRR Retention Rate

If this is your first time working with cohorts, read our guide on how a Cohort Analysis works in ChartMogul.

Net MRR Retention shows how much monthly recurring revenue (MRR) you retain month by month after a customer begins a subscription. Revenue growth resulting from expansion and reactivation is offset by losses due to contraction and churn.

This metric helps you identify points in the customer lifecycle where you gain or lose revenue from customers.

TL;DR

The Net MRR Retention cohort analysis groups customers by the month and year they started their first subscription and tracks the development (increase or decrease) of MRR within the group for each whole calendar month of the cohort’s existence.

What is a good net MRR retention rate?

To grow your SaaS business, a net MRR retention rate as close to (or higher than) 100% is ideal, meaning your customers continue to renew their subscriptions and growth from expansion and reactivations matches or outpaces contraction and churn.

A Net MRR Retention above 100% is possible when you either retain all subscription revenue (i.e., no cancellations) or when MRR growth due to expansion and reactivation is higher than MRR lost due to contraction and churn.

Chart Notes

  • Customers who begin their first subscription in the same month and year are grouped in the same cohort.
  • ChartMogul classifies customers whose subscriptions have a past-due payment as Past due. These subscriptions contribute to metrics until they are explicitly canceled or churned based on your auto-churn of delinquent subscriptions setting. Learn more about subscription statuses.

Calculation

ChartMogul calculates Net MRR Retention Rate as the percentage of MRR for subscriptions that remain active in the given calendar month to the total MRR for those subscriptions at the start of the cohort. MRR gained due to expansion and reactivation positively impacts the MRR retention rate. Conversely, MRR lost due to contraction and churn negatively impacts the retention rate.

Cohort Table

Cohort Value is the total MRR of new subscriptions started by customers in the cohort, classified by ChartMogul as New Business.

The metric displayed in each table cell is either the percentage change of the cohort’s Net MRR Retention Rate (relative to the previous month or the starting month of the analysis) or the total MRR of active subscriptions (depending on whether you’ve selected Rate % or MRR from the Show drop-down).

Select any cell with a value that has changed from the previous month to view MRR movements for that month.

Next Steps

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