Net MRR churn vs gross MRR churn
Gross churn shows the leak. Net churn shows whether expansion covered it. Use both when MRR looks flat but acquisition looks busy.
Gross and net MRR churn answer different questions. Gross tells you how much recurring revenue left. Net tells you whether expansion covered the loss.
Gross MRR churn
Share of starting MRR lost to cancellations and contraction in the period:
Gross MRR churn % = Churned MRR ÷ MRR at start of period × 100Net MRR churn
Subtract expansion (upgrades, seats, add-ons) from what you lost:
Net MRR churn % = (Churned MRR − Expansion MRR) ÷ MRR at start × 100Net churn can be negative when expansion beats losses. That is a strong sign.
Why both matter
Gross churn shows the leak. Net churn shows whether the business still compounds. A company can look healthy on net churn while gross churn is eating every new logo. That pattern often shows up as flat MRR with busy acquisition.
Always use MRR at the start of the period as the base. Ending MRR hides the truth.
For the logo-side formula, see how to calculate SaaS churn rate. To turn the math into a diagnosis, open why did my SaaS churn increase or why are SaaS customers churning.
Get the ratios, then diagnose the change.
Calculate SaaS KPIs including churn-related math, then rank churn causes.
Or connect FlarePath for ongoing diagnosis.