Revenue Churn Formula: Exact SaaS Calculation Rules

Strict revenue churn measures gross recurring revenue loss from an existing base before expansion offsets anything.

• StartingMRR: recurring revenue base at the start of the measurement period.
• ChurnedMRR: recurring revenue fully lost from churned customers.
• ContractionMRR: recurring revenue lost from downgrades or seat reductions, excluding full churn.

• Full churn belongs in ChurnedMRR, not in both churn and contraction.
• Partial downgrade belongs in ContractionMRR.
• The same recurring revenue policy must govern numerator and denominator.

• Exclude expansion revenue from gross revenue churn.
• Exclude one-time fees, taxes, pass-through charges, and hardware.
• Exclude new-logo revenue from the numerator entirely.

Strict revenue churn is a gross loss metric. Once expansion is netted against losses, the metric becomes net revenue churn or contributes to NRR logic, not gross revenue churn.

• Zero starting base: the rate is undefined.
• Currency translation drift: FX policy can create fake churn if not stabilized.
• Pause/reactivation policy: temporary pauses need consistent treatment.

Suppose StartingMRR = 100,000, ChurnedMRR = 7,000, and ContractionMRR = 3,000.

If expansion MRR is 12,000, it changes NRR but contributes 0 to strict gross revenue churn.

Revenue churn is a gross recurring revenue loss rate built from churned and contraction MRR over a starting base. If contraction is ignored or expansion is netted in, the result is not strict revenue churn.

Core metric pages:

• MRR
• MRR vs ARR
• ARR
• Net New MRR