Chart: Net MRR Churn Rate

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Net MRR Churn Rate charts the percentage of recurring revenue lost from contraction and churn, offset by expansion and reactivation over time.

To view the rate of total revenue lost, use Gross MRR Churn Rate.

TL;DR

Net MRR churn rate charts the loss of recurring revenue offset by revenue gains over time. For SaaS businesses, it’s ideal for this metric to be negative.

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 and reactivation 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

Calculation

ChartMogul calculates Net MRR Churn Rate based on your Churn Rate Formula setting.

Standard Formula (B2B)

Formula

Math equation: open paren sum of Churn and Contraction MRR minus sum of Expansion and Reactivation MRR close paren divided by MRR as the start of the period

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

Math equation: sum of 1 minus open paren open paren MRR at the end of the day minus New Business MRR that day close paren divided by MRR at the start of the day close paren

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)).

Chart Data

See Chart Data.

Next Steps

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