Two views of recurring revenue movement. Gross MRR shows what you lose. Net MRR shows what is left after expansion makes up for some of the loss.
Last updated: 2026-04-01
The top-of-funnel view. Tracks new MRR added and MRR lost to churn or contraction. Does not credit expansion or reactivation back to the loss side.
Best for understanding pure customer health. If gross churn is 10% but net churn is 2% because expansion masks the loss, you still have a 10% problem to fix.
The all-in view. New MRR plus expansion plus reactivation, minus churn and contraction. This is what shows up in your MRR chart.
Best for tracking the actual state of the business and forecasting next quarter's revenue movement.
Gross MRR churn % = (Churn MRR + Contraction MRR) / MRR at start of periodThe result is always non-negative. Cancellations and downgrades flow in. Nothing flows out.
Net MRR churn % = (Churn + Contraction - Expansion - Reactivation) / MRR at startThe result can be negative. Negative net churn is the SaaS holy grail: existing customers grow faster than others leave.
| Criteria | Gross MRR | Net MRR |
|---|---|---|
| Includes expansion | No | Yes |
| Can be negative | No (always >= 0) | Yes (negative net churn is best-in-class) |
| Best for | Customer health and product retention | Business state, forecasting, board reporting |
| Hides what | The upside from expansion strategy | The size of the churn problem |
| Pairs with | Gross retention rate | Net retention rate (NRR) |
| Healthy benchmark | <5% monthly is healthy, <3% best-in-class | NRR > 100% healthy, > 130% world-class |
| First metric to track | Yes. Diagnose churn first | After gross is stable |
| LTV input | Use for cohort-based LTV | Use for net-retention-adjusted LTV |
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Score your own data with both frameworks. Compare results and pick the one that fits your team.
Both, but in different rooms. Net MRR (and net retention) is the headline number. Gross MRR (and gross retention) is the diligence number that tells investors whether the headline is durable. ChartMogul reports both side by side because each answers a different question.
Median early-stage SaaS sits around 6 to 9% gross MRR churn per month, dropping to 3 to 5% above $1M ARR according to ChartMogul's benchmarks. Below 5% monthly is healthy. Below 3% is best-in-class. SMB churn is always higher than enterprise churn.
It means existing customers are expanding faster than other customers are churning out. The base grows even without any new acquisition. This is the "holy grail" investors talk about, and it is what enables the best-in-class NRR figures above 130%.
New, expansion, contraction, churn, and reactivation. New is brand-new customers. Expansion is upgrades or seat additions on existing accounts. Contraction is downgrades or seat reductions. Churn is full cancellations. Reactivation is a former customer who came back.
Gross. Without it, you can't tell if your low net churn is because customers are happy or because expansion is doing the heavy lifting. Track gross first, fix it, then watch net move with it.