What is Churned MRR (Cancellation MRR)?
Churned MRR (Cancellation MRR) is the portion of existing-customer monthly recurring revenue that disappears in a given period because customers cancel (and stop paying).
It’s a direct measure of revenue leakage that weakens ARR run-rate, reduces gross revenue retention (GRR), and lowers the predictability of future cash flows.
In value-creation terms, higher churned MRR compresses LTV, worsens CAC payback, and increases execution risk in planning, budgeting, and valuation work.
Formula
Example
Single period (Monthly):
- Starting MRR (existing customers): $100,000
- Churn rate (monthly): 3%
- Churned MRR: $100,000 × 0.03 = $3,000
- Ending MRR: $100,000 − $3,000 = $97,000
- Retention: (1 − 0.03) × 100 = 97%
Project over N months (Compounded):
- Starting MRR (existing customers): $100,000
- Monthly churn rate: 2%
- Horizon: 12 months
- Projected ending MRR: $100,000 × (0.98)^12 = $78,472
- Projected MRR lost (cumulative): $100,000 − $78,472 = $21,528
- Cumulative churn: [1 − (0.98)^12] × 100 = 21.53%