Both of these churn metrics are important to track. Revenue Churn is a measure of the lost revenue. Gross Revenue Churn Rate. This calculation reflects the amount of recurring revenue (ARR/MRR) a company is able to retain for any given period. David Skok’s in-depth article about negative churn shows how a low initial churn rate can equate to significant losses in the long run if not improved. Relevance and Uses. The formula for revenue churn is similar to customer churn: Therefore, the churn rate of the company for the period of one month is 4%. Example: Started with $30.000 per month, and lost $1000 recurring revenue. Revenue Churn Rate. The other type of churn rate calculation used by subscription businesses is revenue churn rate. The formula for calculating gross revenue churn is very similar to customer churn: Identify the total amount of revenue lost during a specified period of time (a month, quarter, or year). 1. To calculate run rate, take your current revenue over a certain time period—let’s say it’s one month. For example, If a company had $300,000 MRR at the beginning of the month, $250,000 MRR at the end of that month, and $70,000 MRR in upgrades from existing customers, the net monthly revenue churn rate would be -6.6% . If you want to know the difference between what you gained and lost, you’re going to need to calculate your net revenue churn rate. In contrast to customer churn rate, which looks at whether a customer is still a subscriber with you, revenue churn rate looks at whether a given cohort of recurring revenue has been retained over a given time period. $$\text{% Customer churn rate}=\frac{(20-18)}{20}=\frac{2}{20}=10\%$$ Revenue Churn. Revenue churn (also known as "MRR churn rate") is used to look at the rate at which monthly recurring revenue (MRR) is lost, as a result of churned customers and downgraded subscriptions. The churn of income is 3.3%. Net revenue churn rate formula (Churned MRR - Expansion MRR) ÷ Starting MRR 30 days ago x 100. You add up the total revenue, ignoring how many customers make up the total revenue. Below you can find one last scenario for revenue churn calculation. Calculate monthly revenue churn: Revenue started at the beginning of the month, divided by the lost revenue in that month. Divide that number by how much revenue you started with in that specified period of time. Revenue Churn. The revenue churn is 12%. Multiply that by 12 (to get a year’s worth of revenue). This is also referred to as “Logo Churn.” Calculation: (Customers churned in period/Customers at the start of the period) Calculation 2: Gross Revenue Retention Rate vs. Net Revenue Retention Rate. Churn measures a company’s customer/revenue attrition rate by calculating the percentage of customers/revenue a company loses over a specific time frame. 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