Enter customers and recurring revenue for one period. Get your customer churn rate, the correct annualized figure, gross revenue churn, net revenue retention and the implied average customer lifetime.
Churn quietly caps growth. This shows how much of your base you lose, and whether expansion from existing customers makes up for it.
Use one period, usually a month. Leave out customers added during the period.
Churn and retention for the period you entered.
Customer churn rate = customers lost during the period / customers at the start of the period x 100
Two details trip people up. First, use the customer count at the start of the period. Second, leave out customers who joined during the period, otherwise a strong sales month hides a retention problem.
| Metric | Formula | What it tells you |
|---|---|---|
| Customer (logo) churn | Customers lost / customers at start | How many accounts walk away |
| Gross revenue churn | MRR lost to cancellations and downgrades / starting MRR | How much money walks away |
| Net revenue churn | (MRR lost - expansion MRR) / starting MRR | Whether expansion covers the losses |
| Gross revenue retention (GRR) | (Starting MRR - MRR lost) / starting MRR | The ceiling on retention, ignoring upsell |
| Net revenue retention (NRR) | (Starting MRR + expansion - MRR lost) / starting MRR | Whether your existing base grows by itself |
When customer churn is high but revenue churn is low, you are losing small accounts and keeping big ones, which is often fine. When revenue churn is higher than customer churn, your largest customers are leaving, which is an emergency.
| Monthly churn | Annual churn (compounded) | Average customer lifetime |
|---|---|---|
| 1% | 11.4% | 100 months |
| 2% | 21.5% | 50 months |
| 3% | 30.6% | 33 months |
| 5% | 46.0% | 20 months |
| 8% | 63.2% | 12.5 months |
At 5 percent monthly churn you replace almost half your customer base every year just to stand still. That is why retention is usually the cheapest growth lever a SaaS company has.
Most churn is decided before the contract is signed. Customers who were a poor fit, oversold, or never reached their first result leave first.
Churn feeds directly into lifetime value. Plug your churn rate into the customer lifetime value calculator to see what it does to LTV:CAC and payback.
Divide the number of customers lost during a period by the number of customers you had at the start of that period, then multiply by 100. Churn rate = customers lost / customers at start x 100. If you start the month with 400 customers and lose 12, your monthly customer churn rate is 3 percent. New customers added during the period are left out of the calculation.
Gross revenue churn = MRR lost to cancellations and downgrades / MRR at the start of the period x 100. Net revenue churn subtracts expansion revenue from existing customers before dividing. Revenue churn matters more than customer churn when your customers pay very different amounts.
Customer churn, also called logo churn, counts accounts lost. Revenue churn measures the money lost. Losing ten small customers and one large one gives a modest customer churn rate but can produce a high revenue churn rate. Track both.
Do not multiply by 12. Churn compounds, because each month you lose a share of a smaller base. Annual churn = 1 - (1 - monthly churn) to the power of 12. A 3 percent monthly churn rate equals about 30.6 percent annual churn, not 36 percent.
Net revenue retention is the share of starting recurring revenue you still have after churn, downgrades and expansion from the same customers. NRR = (starting MRR + expansion - churned and contraction MRR) / starting MRR x 100. Above 100 percent means existing customers grow faster than you lose them.
It depends heavily on who you sell to. Companies selling to small businesses churn far more than those selling to enterprises, so compare against your segment, not a single universal number. For retention, SaaS Capital's 2025 benchmarks put median net revenue retention at 102 percent for companies with annual contract values between $25K and $50K, with the top quartile at 111 percent.
Send me your churn, NRR and ICP. I will point to where I think the leak starts, whether that is fit, onboarding or expansion.