Revenue churn is the share of recurring revenue you lose from existing customers in a period, before counting upsells or expansions.

How it works

Gross revenue churn = revenue lost from churn and downgrades ÷ starting recurring revenue.

Start the month at $500K MRR. Cancellations and downgrades cost $25K. Gross revenue churn = 5% for that month.

Net revenue churn subtracts expansion revenue from the same numerator logic — or equivalently, reports net revenue retention above 100% when expansion outweighs losses. A company with 3% gross churn but strong upsell might show 105% net revenue retention.

Revenue churn differs from logo churn: losing one small customer vs one enterprise account hits revenue churn harder. Always segment by customer size and cohort.

Annual contracts may show churn at renewal dates, creating lumpy months — use trailing twelve-month views for board reporting.

Why it matters

• Founders: Fix churn before scaling paid acquisition; high churn raises CAC payback and burns cash.
• Investors: Net revenue retention above 100% is a hallmark of category leaders; sustained gross churn above single digits in SMB SaaS raises diligence questions.

Common mistake

Reporting only logo churn when a handful of large accounts drive most ARR. Revenue churn exposes concentration risk that customer counts hide.

Related ideas

See also logo churn, retention curve, SaaS metrics, and Rule of 40.