What this calculator measures
Gross revenue churn measures recurring revenue lost before expansion. Net revenue retention adds expansion from the same starting customer cohort.
Common use cases
Use this model when the inputs describe the same decision, period and customer or product scope.
- Calculate gross and net recurring-revenue churn for a reporting period.
- Use the result with the recorded inputs: Starting recurring revenue, Churned revenue, Contraction revenue, Expansion revenue.
- Compare multiple scenarios before making a marketing decision.
Formula
Net retention adds expansion back while gross churn does not.
Revenue Churn: formula, inputs and interpretation
Net retention adds expansion back while gross churn does not.
Formula
Example input values
Worked calculation and answer
Starting with $10,000 MRR, losing $500, recording no contraction, and adding $800 in expansion gives 5% gross revenue churn and 103% net revenue retention.
Variable definitions and checks
- Starting recurring revenue (start): Use a numeric value at least 0. Check its reporting period and definition before comparing it with other inputs.
- Churned revenue (lost): Use a numeric value at least 0. Check its reporting period and definition before comparing it with other inputs.
- Contraction revenue (contraction): Use a numeric value at least 0. Check its reporting period and definition before comparing it with other inputs.
- Expansion revenue (expansion): Use a numeric value at least 0. Check its reporting period and definition before comparing it with other inputs.
When the result may mislead
The calculation reflects the variables named above, not unentered taxes, platform terms, reporting delays, financing charges or external forecasts. For comparisons, keep the same units and reporting period and change one assumption at a time.
How to interpret the result
Net retention can exceed 100% when expansion is greater than churn and contraction. Keep new-customer revenue outside this cohort calculation.
Assumptions and limitations
- Use recurring revenue from the same customer cohort and reporting period. The example assumes no contraction and excludes new-customer revenue.
Frequently asked questions
Can net revenue retention exceed 100%?
Yes. Expansion from existing customers can exceed lost and contracted revenue.
Is gross churn the same as net retention?
No. Gross churn excludes expansion; net retention includes expansion and contraction.
Should new customers be included?
No. Net retention tracks only the starting customer cohort.