Definition
MRR churn rate measures churned MRR (lost recurring revenue from cancellations) as a percentage of starting MRR for a period.
Formula
MRR churn rate = churned MRR / starting MRR
Example
If starting MRR is $200k and churned MRR is $8k in a month, MRR churn rate = $8k / $200k = 4% for the month.
How to use it
- MRR churn is revenue churn (not customer/logo churn).
- Track churned MRR and contraction MRR separately, then use GRR/NRR for the full picture.
- Convert longer windows to monthly-equivalent churn to compare periods consistently.
Common mistakes
- Mixing churned MRR with contraction MRR without labeling.
- Using ending MRR as the denominator instead of starting MRR.
- Mixing billings/cash with run-rate churn metrics.
Why this matters
This term matters because small changes compound in SaaS metrics. Use consistent definitions by cohort and segment so you can diagnose retention, payback, and growth quality.
Practical checklist
- Write a 1-line definition for "MRR Churn Rate" that your team will use consistently.
- Keep the time window consistent (weekly/monthly/quarterly) when comparing trends.
- Segment results (channel/plan/cohort) before drawing big conclusions from blended averages.
- Use a calculator that references this term (e.g., MRR Churn Rate Calculator) to sanity-check assumptions.
- Read the related guide (e.g., MRR churn rate: definition, formula, and monthly-equivalent conversion) for context and common pitfalls.
Where to use this on MetricKit
Calculators
- MRR Churn Rate Calculator: Calculate MRR churn rate from churned MRR and starting MRR (with monthly-equivalent conversion).
- MRR Waterfall Calculator: Build an MRR waterfall: starting MRR + new + expansion - contraction - churn = ending MRR.
Guides
- MRR churn rate: definition, formula, and monthly-equivalent conversion: MRR churn rate explained: churned MRR / starting MRR, plus how to convert non-monthly windows into a monthly-equivalent rate.
- Churn: How to measure churn rate correctly: A guide to churn rate: customer churn vs revenue churn, measurement choices, and how to track churn by cohort.
- MRR: what it means (and how to track it cleanly): A guide to MRR: definitions, what to include/exclude, and how to decompose MRR changes over time.
- Retention & churn hub: cohorts, GRR/NRR, and retention curves: A practical hub for retention measurement: churn rate, GRR/NRR, cohort retention curves, and how to set retention targets without getting misled by noise.