Definition
Gross revenue churn measures the share of starting MRR lost to contraction (downgrades) and churn (cancellations) over a period. It excludes expansion by definition.
Formula
Gross revenue churn = (contraction MRR + churned MRR) / starting MRR.
Monthly-equivalent conversion
If your window is N months: monthly-equivalent churn = 1 - (1 - period churn)^(1/N).
How it relates to GRR and NRR
- GRR focuses on remaining revenue after losses (ending gross / starting).
- NRR adds expansion, so NRR can look healthy even when gross churn is high.
- Track gross churn + GRR/NRR together to avoid being misled by expansion.
Gross revenue churn QA checklist
- Use starting MRR as the denominator for the period.
- Separate downgrades (contraction) from cancellations (churn).
- Match the churn window to your billing cadence (monthly vs annual).
Benchmarks and context
- High-growth companies often accept higher gross churn early, but it should trend down.
- Enterprise contracts may show lumpy churn at renewal cycles.
- Segment by plan and cohort before comparing to peer benchmarks.
Common mistakes
- Mixing cohorts or time windows (starting MRR from one cohort, losses from another).
- Including expansion in the churn metric (gross churn excludes expansion).
- Using ending MRR as the denominator instead of starting MRR.