Revenue churn tells you how many dollars you are losing, which is what actually moves the business. Here is the definition, the formula, and the gross-versus-net distinction.
Revenue churn is the percentage of recurring revenue a business loses over a period from cancellations and downgrades. It matters more than customer count because not all customers are worth the same.
Revenue churn measures lost dollars, not lost logos. Gross revenue churn counts only the revenue you lost (cancellations and downgrades). Net revenue churn subtracts expansion (upgrades, cross-sell) from those losses, and can be negative when your existing customers grow faster than they leave. It is closely tied to net revenue retention and is a truer health signal than logo churn.
Start the month with $100,000 MRR. You lose $4,000 to cancellations and $1,000 to downgrades, for $5,000 lost. Gross revenue churn is (5,000 / 100,000) x 100 = 5 percent. If you also gained $7,000 in expansion, net revenue churn is negative 2 percent, which is excellent.
Revenue is what funds the company, so revenue churn is the leak that counts. Losing one enterprise account can outweigh fifty small cancellations. Investors scrutinize net revenue churn because negative net churn means you grow even with zero new customers. It is the metric behind a durable GTM strategy.