Churned MRR (Churned Monthly Recurring Revenue)

What is churned MRR?

Churned Monthly Recurring Revenue (Churned MRR), also known as Monthly Recurring Revenue Churn, is the total amount of recurring revenue lost within a given month due to subscription cancellations or downgrades. It reflects the direct financial impact of customers who stop paying for a recurring service, excluding any one-time charges or non-recurring income.

Unlike churn rate, which measures the percentage of customers lost, churned MRR quantifies the actual dollar value of recurring revenue that has left the business, making it a critical metric for understanding the monetary cost of churn.

Why churned MRR matters

• Revenue impact visibility: Shows the exact amount of recurring revenue lost, allowing teams to assess the severity of churn in financial terms.
• Retention strategy alignment: Helps prioritize retention efforts on high-value accounts whose churn would have the greatest revenue impact.
• Forecast accuracy: Feeding churned MRR into financial models improves revenue projections by factoring in real loss trends.
• Investor confidence: Investors and stakeholders track churned MRR to gauge how well a subscription business retains its revenue base.
  

How to calculate churned MRR

The formula for churned MRR is: Churned MRR = MRR lost from cancellations + MRR lost from downgrades

Example:

• MRR lost from cancellations: $5,000
• MRR lost from downgrades: $2,000
• Churned MRR = $7,000

Inclusions and exclusions

• Include:
  
  • Recurring revenue lost from customers who cancel their subscription entirely.
  • Recurring revenue lost from customers who downgrade to a lower-priced plan.
    
• Exclude:
  
  
  • One-time setup or service fees.
  • Revenue lost from temporary payment failures (unless they lead to cancellation).
  • Non-recurring product or service sales.
    

Related metrics

Key considerations

• Customer segmentation: Churned MRR can be segmented by plan type, geography, or customer cohort to uncover trends.
• Seasonality: Certain months may show higher churn due to billing cycles or customer behavior patterns.
• Retention initiatives: Tracking churned MRR before and after targeted campaigns helps quantify ROI from retention efforts.
  

Churned MRR in subscription businesses

For subscription-based companies, whether SaaS, publishing, or streaming, churned MRR is a direct measure of revenue erosion. It highlights not only how many customers are leaving but also how valuable those customers were to the business. By monitoring churned MRR alongside retention metrics and predictive scores, commercial teams can quickly identify high-value accounts at risk, deploy targeted interventions, and recover lost revenue through winback strategies.