Revenue churn (gross & net)

The recurring revenue you lose to cancellations and downgrades — and, in its net form, the rare metric that can turn negative and mean you're growing from your existing base alone.

In plain English

Where logo churn counts how many customers leave, revenue churn counts how many euros leave. That distinction matters because not every customer is worth the same: lose one big account and your customer count barely moves while your revenue takes a real hit. Revenue churn comes in two flavours. Gross revenue churn is the pure loss — everything you bled from cancellations and downgrades. Net revenue churn takes that loss and subtracts the expansion revenue you gained from upsells in the same group. When expansion outweighs the losses, net churn goes negative — and negative churn is one of the strongest signals in SaaS, because it means your base grows in value all on its own.

The formula

Gross revenue churn = MRR lost (churn + contraction) ÷ Starting MRR
Net revenue churn = (churn + contraction − expansion) ÷ Starting MRR

Gross churn floors at zero, but net revenue churn can go below zero — and a negative figure is exactly what you want, because it means expansion outran every loss.

A worked example

Start the period at €100,000 MRR. You lose €10,000 to cancellations and downgrades, but existing customers also add €15,000 in expansion.

Gross revenue churn = €10,000 ÷ €100,000 = 10%
Net revenue churn = (€10,000 − €15,000) ÷ €100,000 = −5%

Gross churn says you lost 10% — real money out the door. But net churn is −5%: expansion more than covered the losses, so the same cohort is worth 5% more than when it started. That negative number is the holy grail.

What's a good revenue churn?

Benchmark gross churn on its own first, then aim to push net churn below zero:

Monthly gross revenue churn	Verdict	What it signals
< 1%	Excellent	Very sticky revenue
1–2%	Acceptable	Manageable, keep an eye on it
> 2%	Watch closely	Erodes LTV and growth efficiency

Gross churn tells you how leaky the bucket is; net revenue churn tells you whether expansion is filling it faster than it drains. Negative net churn is the goal — it's the foundation of net revenue retention above 100%.

Frequently asked questions

What's the difference between gross and net revenue churn?

Gross revenue churn only counts revenue lost to cancellations and downgrades, so it can never be below zero. Net revenue churn subtracts expansion revenue from those losses, so when upsells outweigh losses it goes negative — which is the goal.

Is negative revenue churn good?

Yes, negative net revenue churn is the goal. It means expansion from existing customers more than offsets the revenue you lose, so your customer base grows in value without any new customers. It's the engine behind net revenue retention above 100 percent.

What is a good gross revenue churn rate?

For monthly gross revenue churn, under 1 percent is excellent, 1 to 2 percent is acceptable, and above 2 percent is worth watching closely. Lower churn protects lifetime value and makes growth far more efficient.

Net revenue retention · Churn rate · Expansion revenue · MRR

Learn more

The complete guide to value-based bidding · Value-based bidding without a data team