Churn Rate Calculator guide
Enter customers at the start of the month, customers lost and gained, and your MRR movements. Get customer churn, annualized churn, revenue churn, net revenue retention, and a 12-month MRR projection.
Customer churn and revenue churn are different numbers
Customer churn counts heads: what share of the customers you had at the start of the month cancelled. Revenue churn counts dollars: what share of starting monthly recurring revenue (MRR) you lost. They diverge whenever customers pay different amounts. Lose ten $20 customers and one $2,000 customer in the same month and your customer churn looks mild while revenue churn is ugly.
Track both. Customer churn tells you about product fit and onboarding. Revenue churn and net revenue retention tell you whether the business grows even if you stop selling.
The formulas
Customer churn rate = customers lost during the period ÷ customers at the start of the period. New customers signed during the month are left out of the denominator, because they were not around to churn at the start.
Gross revenue churn = (churned MRR + contraction MRR) ÷ starting MRR. Contraction is revenue lost from downgrades by customers who stayed.
Net revenue retention (NRR) = (starting MRR + expansion − contraction − churned MRR) ÷ starting MRR. It shows what last month's customers are worth this month, including upsells. Gross revenue retention (GRR) is the same without expansion, so it can never exceed 100 percent.
Annualized churn = 1 − (1 − monthly churn)^12. Do not multiply by 12. Churn compounds on a shrinking base, so 4 percent a month is 38.7 percent a year, not 48 percent.
Worked example
A SaaS starts the month with 1,000 customers and loses 40 while signing 60 new ones. Customer churn is 40 ÷ 1,000 = 4.00 percent monthly, or 38.7 percent annualized. The month ends at 1,020 customers.
Starting MRR is $50,000. Cancellations take $2,000, downgrades take $800, and upgrades add $2,500. Gross revenue churn = ($2,000 + $800) ÷ $50,000 = 5.60 percent. NRR = ($50,000 + $2,500 − $800 − $2,000) ÷ $50,000 = 99.4 percent. GRR = 94.4 percent. Add $4,000 of new MRR and ending MRR is $53,700.
If those rates hold, the projection table compounds them: each month the existing base keeps 99.4 percent of its revenue and $4,000 of new business is added. After 12 months MRR reaches about $92,964, with roughly 1,194 customers. Push NRR above 100 percent and the existing base grows on its own; that is the engine behind most durable SaaS companies.
Benchmarks worth knowing
For SMB-focused SaaS, 3 to 5 percent monthly customer churn is common and 2 percent or lower is strong. Mid-market and enterprise software, sold on annual contracts, typically sees 5 to 10 percent annual churn. Consumer subscriptions (apps, boxes, streaming) often run 5 to 10 percent a month.
For NRR, 100 percent means the existing base is flat. Public SaaS companies have historically reported roughly 105 to 120 percent at the median, and best-in-class infrastructure and developer tools have posted 130 percent or more. GRR above 90 percent is considered healthy for B2B.
Benchmarks vary widely by price point, contract length, and customer size, so compare yourself against companies selling similar contracts to similar customers.
Measurement mistakes
Counting new customers in the denominator. Using average or ending customers instead of starting customers makes churn look lower during fast growth.
Mixing monthly and annual plans. Annual customers can only churn at renewal, so they depress monthly churn for 11 months and spike it in the twelfth. Split cohorts by billing term.
Treating failed payments as voluntary churn. Involuntary churn from expired cards can be 20 to 40 percent of total churn for card-billed subscriptions, and dunning emails plus card-updater services recover much of it.
Netting new MRR into churn. 'Net MRR churn' that subtracts new sales hides retention problems behind a strong sales month. Keep new business out of churn and retention metrics entirely.
What to do with the number
Churn feeds straight into customer lifetime value: LTV = monthly gross profit per customer ÷ monthly churn. Halving churn doubles LTV, which usually does more for a subscription business than any pricing or ad change. Plug your churn rate into the LTV:CAC calculator to see how much you can afford to pay for a customer, and run it monthly so a slow rise in churn gets caught before it shows up in revenue.
Frequently asked questions
How do you calculate churn rate?
Divide customers lost during the period by customers at the start of the period. Losing 40 of 1,000 starting customers in a month is a 4% monthly churn rate.
How do I convert monthly churn to annual churn?
Use 1 − (1 − monthly churn)^12, not monthly churn × 12. 4% monthly churn is 38.7% annual churn, because churn compounds on a shrinking base.
What is revenue churn?
Gross revenue churn is lost MRR from cancellations and downgrades divided by starting MRR. $2,800 lost from $50,000 starting MRR is 5.6%.
What is net revenue retention (NRR)?
NRR = (starting MRR + expansion − contraction − churned MRR) ÷ starting MRR. Above 100% means existing customers grow revenue even with no new sales.
What is a good churn rate for SaaS?
For SMB SaaS, 3 to 5% monthly is common and under 2% is strong. Enterprise SaaS on annual contracts often sees 5 to 10% annual churn.
Should new customers be included in churn?
No. Use customers at the start of the period as the denominator. Including new sign-ups hides churn during fast growth.
Is my customer data uploaded?
Everything runs in your browser. Nothing you enter is uploaded to a server or stored by us.