Like most subscription metrics, there is no universal definition. This calculation reflects the amount of recurring revenue (ARR/MRR) a company is able to retain for any given period. Revenue Churn is a measure of the lost revenue. The other type of churn rate calculation used by subscription businesses is revenue churn rate. 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. The churn of income is 3.3%. The churn rate formula is of great importance in the companies that are having their business based on the subscribers, i.e., company, which generates most of its revenue from the subscription fees received from its customers. 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. $$\text{% Customer churn rate}=\frac{(20-18)}{20}=\frac{2}{20}=10\%$$ Revenue Churn. 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). Multiply that by 12 (to get a year’s worth of revenue). Here’s how the run rate formula looks: Example of revenue run rate 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. If you made $15,000 in revenue for each month, your annual run rate would be $15,000 x 12, or $180,000. Therefore, the churn rate of the company for the period of one month is 4%. Below you can find one last scenario for revenue churn calculation. Revenue Churn Rate. Relevance and Uses. Gross Revenue Churn Rate. The formula for revenue churn is similar to customer churn: 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% . Revenue Retention Cohort Analysis Revenue churn rate assuming it was the $1k/mo customer that cancelled would be $1000/$1090 or 92% churn. Calculate monthly revenue churn: Revenue started at the beginning of the month, divided by the lost revenue in that month. Both of these churn metrics are important to track. Divide that number by how much revenue you started with in that specified period of time. 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. 10% logo churn versus 92% revenue churn tells two very different stories. You add up the total revenue, ignoring how many customers make up the total revenue. 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