Churn Rate
Churn rate is the percentage of customers, subscriptions, or recurring revenue lost over a defined period, usually a month or year. It measures how quickly a business sheds its existing base and is a core health metric for subscription and SaaS companies, where retention drives long-term growth.
Customer churn is calculated as customers lost during the period divided by customers at the start, expressed as a percentage. Revenue churn applies the same formula to recurring revenue and can be net of expansion, net revenue churn can even go negative when upsells from retained customers outweigh losses, a strong sign of product health.
A common pitfall is reporting only customer churn while ignoring revenue churn, which hides whether you're losing small or high-value accounts. Churn rate is the inverse of retention rate and is closely tied to customer lifetime value and MRR.
Last updated: 14 June 2026