Churn Rate Calculator: Formula, Retention and Revenue Churn

Churn rate is the share of customers you lose in a period: customers lost ÷ customers at the start × 100. Start a month with 2,000 customers, lose 50 and churn is 2.5%, so retention is 97.5%. Over a year that compounds to about 26.2%, and customers stay about 40 months.

Enter customers at the start of the period and how many you lost, or how many you had at the end. You get churn and retention rates, monthly and annual churn and the average customer lifetime. Add recurring revenue to see revenue churn and net revenue retention, in any currency.

Churn rate formulas

FigureFormula
Churn rateL ÷ S × 100
Retention rate(E − N) ÷ S × 100
Annual churn from monthly1 − (1 − m)12
Average customer lifetime1 ÷ churn
Gross revenue churnRlost ÷ Rstart
Net revenue retention(Rstart − Rlost + Rup) ÷ Rstart

S: customers at the start. L: customers lost. N: new customers. E: customers at the end. m: monthly churn. R: recurring revenue at the start, lost to cancellations and downgrades, and gained from upgrades.

Example

A subscription business starts October with 2,000 customers. During the month 50 cancel and 120 sign up, so it ends with 2,070. Churn is 50 ÷ 2,000 = 2.5% and retention is (2,070 − 120) ÷ 2,000 = 97.5%. At that pace a year’s churn is 1 − 0.97512 = 26.2%, and an average customer stays 1 ÷ 0.025 = 40 months.

Its recurring revenue was 100,000.00 at the start. Cancellations and downgrades took 3,000.00 and upgrades added 5,000.00: gross revenue churn is 3%, and net revenue retention is (100,000 − 3,000 + 5,000) ÷ 100,000 = 102%.

Monthly and annual churn

Monthly churnAnnual churn
1%11.4%
2%21.5%
3%30.6%
5%46.0%
7%58.1%

Frequently asked questions

What is the churn rate formula?

Churn rate = customers lost during a period ÷ customers at the start of the period × 100. If you start a month with 2,000 customers and 50 cancel, churn is 50 ÷ 2,000 = 2.5% for the month. Leave out customers you won during the month: they were not in the starting count.

How do you calculate customer retention rate?

Retention rate = (customers at the end − new customers) ÷ customers at the start × 100. With 2,000 at the start, 2,070 at the end and 120 new, retention is 1,950 ÷ 2,000 = 97.5%. Retention and churn add up to 100%.

How do I turn monthly churn into annual churn?

Do not multiply by 12: each month only the remaining customers can leave. Annual churn = 1 − (1 − monthly churn)^12. A 2.5% monthly churn is about 26.2% a year, not 30%. The calculator converts quarters and years to a monthly rate the same way.

What is a good churn rate?

It depends on who you sell to. Subscriptions for consumers and small businesses often lose several percent of customers a month, while software sold to large companies usually loses far less. Compare your rate with your own trend and with businesses that sell to the same customers.

What is the difference between customer churn and revenue churn?

Customer churn counts accounts that leave. Revenue churn measures the recurring revenue lost to cancellations and downgrades. Net revenue retention also adds upgrades: above 100% means existing customers grow faster than they leave, even if some still churn.

How does churn affect customer lifetime value?

Average customer lifetime is one divided by churn: 2.5% a month means about 40 months. Lifetime value is the gross profit a month times that lifetime, so halving churn doubles the lifetime value of every customer.

Related tools: customer lifetime value calculator, net revenue retention calculator, conversion rate calculator, commission calculator. More on sales and running a sales team on the SalesBond blog and the home page.

Official sources

Updated on Nov 6, 2026. This calculator is for information only and is not tax, legal or payroll advice. Results come from the formulas above. Count customers and revenue for the same period; monthly and annual figures are converted with compounding.

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