Net MRR Churn Calculator Formula
Understand the math behind the net mrr churn calculator. Each variable explained with a worked example.
Formulas Used
Net MRR Churn
net_mrr_churn = churned_mrr + contraction_mrr - expansion_mrrNet MRR Churn Rate
net_mrr_churn_rate = starting_mrr > 0 ? ((churned_mrr + contraction_mrr - expansion_mrr) / starting_mrr) * 100 : 0Negative Churn?
is_negative_churn = (churned_mrr + contraction_mrr - expansion_mrr) < 0 ? 1 : 0Variables
| Variable | Description | Default |
|---|---|---|
churned_mrr | Churned MRR (cancellations)(USD) | 10000 |
contraction_mrr | Contraction MRR (downgrades)(USD) | 3000 |
expansion_mrr | Expansion MRR (upgrades & add-ons)(USD) | 15000 |
starting_mrr | Starting MRR(USD) | 200000 |
How It Works
How to Calculate Net MRR Churn
Formula
Net MRR Churn = Churned MRR + Contraction MRR - Expansion MRR Net MRR Churn Rate = Net MRR Churn / Starting MRR x 100
Net MRR churn is the ultimate SaaS retention metric because it captures both the revenue you lose and the revenue you grow from existing customers in a single number. When expansion exceeds losses, you achieve net negative churn, meaning your existing customer base generates more revenue over time even without new sales. This is the most powerful growth engine a SaaS company can build.
Worked Example
Starting MRR is $200,000. Cancellations lost $10,000, downgrades lost $3,000, but expansions added $15,000.
- 01Net MRR Churn = $10,000 + $3,000 - $15,000 = -$2,000
- 02Net MRR Churn Rate = (-$2,000 / $200,000) x 100 = -1%
- 03Negative churn of -1% means existing customers grew by $2,000 net.
Frequently Asked Questions
What is net negative churn?
Net negative churn occurs when expansion revenue from existing customers exceeds revenue lost to cancellations and downgrades. It means your installed base grows even without new customers. The best SaaS companies achieve net negative churn rates of -2% to -5% monthly.
How do I achieve net negative churn?
Build products with natural expansion paths: usage-based pricing, seat-based models that grow with teams, premium tiers with valuable features, and complementary add-on products. Invest in customer success to drive adoption and upsell conversations.
Ready to run the numbers?
Open Net MRR Churn Calculator