Revenue Churn

Category: Metrics & KPIs · Level: Mid · Also called: Dollar churn, MRR churn

TL;DR

The percentage of recurring revenue lost from existing customers in a period through cancellation or downgrade.

Revenue churn divides MRR or ARR lost to cancellations and contraction by the starting recurring revenue. It's the most direct measure of how leaky the bucket is. Revenue churn ignores new sales and expansion — it's the pure 'how much are we losing' number.

The relationship between revenue churn and logo churn reveals customer concentration. High revenue churn with low logo churn means a few large accounts are leaving; low revenue churn with high logo churn means many small accounts are leaving but the big ones are sticky.

Formula

Revenue Churn Rate = (Churned MRR + Contracted MRR) ÷ Starting MRR × 100%

  • Churned MRR — MRR lost from fully-canceled customers in the period
  • Contracted MRR — MRR lost from existing customers downgrading or reducing seats
  • Starting MRR — MRR at the start of the period

Revenue churn is often lower than logo churn because larger customers churn less than small ones.

Worked example

Starting MRR $500k. Churned MRR $8k + contracted MRR $4k = $12k. Revenue churn = $12k ÷ $500k = 2.4% — better than the 3.0% logo churn rate for the same period because the churned customers were below average ARPU.

Common pitfalls

  • Reporting net revenue churn (which can be negative due to expansion) instead of gross.
  • Mixing voluntary and involuntary churn.
  • Failing to segment by cohort and segment.

When this shows up in a pitch deck

Revenue churn appears on the Traction slide alongside NRR and GRR.

Related terms

  • Logo Churn — The percentage of customers (logos) who cancel in a given period, regardless of how much revenue they represented.
  • Net Revenue Retention — The percentage of recurring revenue retained from a cohort after one year, including expansion, contraction, and churn.
  • Gross Revenue Retention — The percentage of recurring revenue retained from a cohort after one year, excluding expansion — the pure retention metric.
  • Cohort Analysis — Grouping users by sign-up period and tracking each group's behavior over time to spot trends invisible in aggregate metrics.
  • Customer Success Manager — The post-sale owner of the customer relationship, responsible for adoption, retention, and expansion of an account.

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