Skip to main content
market.news — Markets without borders
Financial Metrics

Churn

Rate at which customers cancel or stop using a product.

In depth

Gross churn = lost revenue / starting revenue. Net churn = (lost - upsell) / starting revenue. Best-in-class SaaS achieves negative net churn (upsells exceed losses). High churn devastates LTV and unit economics.

Frequently asked about Churn

What is Churn?

Rate at which customers cancel or stop using a product. Gross churn = lost revenue / starting revenue. Net churn = (lost - upsell) / starting revenue. Best-in-class SaaS achieves negative net churn (upsells exceed losses). High churn devastates LTV and unit economics.

Why does Churn matter for investors?

In financial metrics, Churn is one of the building blocks investors use to compare opportunities and assess risk. Understanding it helps you read research notes, earnings reports, and market commentary without getting lost in jargon.

How is Churn used in practice?

Gross churn = lost revenue / starting revenue. Net churn = (lost - upsell) / starting revenue.

Related terms

ARR (Annual Recurring Revenue)

Annualized run-rate of subscription or recurring contract revenue.

LTV (Lifetime Value)

Total profit a customer generates over their relationship with a company.

CAC (Customer Acquisition Cost)

Sales and marketing spend divided by new customers acquired.

Looking for more financial terms?

Browse Full Glossary →