Gross Revenue Churn - SaaS Glossary

Gross revenue churn measures starting recurring revenue lost to cancellations and downgrades.

Gross revenue churn is the share of an existing revenue base lost during a period before offsetting those losses with expansion. It combines full customer cancellations with spending reductions among retained customers.

Example

A month starts with $40,000 MRR. Cancellations remove $1,200 and downgrades remove $800. Gross revenue churn is $2,000 divided by $40,000, or 5%. Expansion of $3,000 does not alter this loss measure.

How to use it

Use the metric to inspect leakage even during growth. In the example, incoming expansion exceeds lost revenue, but customers still remove 5% of the starting base. Separating cancellation and contraction reveals whether the issue is departure or declining account value.

With consistent cohort and timing rules, gross revenue churn equals 100% minus GRR. Some reports use revenue churn to mean only full cancellations, so specify whether contraction is included. Do not divide by closing revenue, which changes the denominator after the losses occur.

Further reading: ChartMogul on Gross Revenue Churn.