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
- 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.
Calculation
ChartMogul calculates Net MRR Churn Rate based on your Churn Rate Formula setting.
Standard Formula (B2B)
Formula
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)).
Chart Data
See Chart Data.
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