Chart: Gross MRR Churn Rate
The Gross MRR Churn Rate chart tracks the percentage of recurring revenue lost through contraction and churn over time, without accounting for expansion or reactivation revenue. For SaaS businesses, it’s a clear, unfiltered view of revenue erosion. Keeping this rate low is essential for sustainable growth.
Since this metric only measures revenue lost, it can never be negative. Your gross MRR churn rate will always be higher than your net MRR churn rate, as net MRR churn rate is offset by expansion.
What is a good gross MRR churn rate?
Ideally, you want your gross MRR churn rate to be as low as possible. In our analysis of data from SaaS businesses, the lower your business’s average revenue per account (ARPA), the higher your churn rate.
A SaaS business making less than $10,000 of MRR can expect a relatively high churn rate, e.g., 8–9% per month. However, once the business attains approx. $10,000 in MRR, the rate of churn typically stabilizes to 4–5% per month.
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.
- Learn more about net MRR movements, which ChartMogul uses to calculate gross MRR churn rate.
- 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 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
(Net Churn MRR + Net Contraction MRR) ÷ Starting MRR
- Selecting Exclude MRR contraction from numerator removes Net 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. | (Net Churn MRR + Net Contraction MRR + MRR Leaving Segment) ÷ 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). | (Net Churn MRR + Net Contraction MRR + Contraction Left MRR) ÷ Starting MRR |
| Excluded from numerator (100% retention) | Subscribers leaving the segment are ignored entirely; the formula is unchanged. | (Net Churn MRR + Net Contraction MRR) ÷ Starting MRR |
Example
At the start of the month, you have $100 in MRR. During the month, your net churn is $10 and your net contraction is $10. Your gross MRR churn rate is 20%: ($10 + $10) / $100.
Shopify formula (B2C)
Formula
SUM (1 − ((Start of Day MRR + Daily Net Churn MRR + Daily Net Contraction MRR) ÷ Start of Day MRR))
Example
At the start of the day, you have $100 in MRR. At the end of the day, you have $95 in MRR. Your gross MRR churn rate is 5%: 1 − ((100 − 5) ÷ 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 Customer Churn Rate 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.
- 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.
- Gross MRR churn rate – The percentage value of gross 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