Churn Rate

Churn Rate measures the percentage of recurring revenue or customers lost from one reporting period to the next.

Rillet provides two churn metrics:

The Churn Rate report displays churn metrics by reporting period.

The Churn Rate report displays:

Gross Churn Rate by period The selected period range determines which reporting periods are included.
Customer Churn Rate by period The percentage of recurring revenue lost due to churned customers during each reporting period.
Historical churn trends over time A visual trend showing how churn changes across reporting periods.

The selected period range determines which reporting periods are included.

Churn Rate compares recurring revenue or customer count at the beginning of a period with what was lost during that same period.

Gross Churn Rate measures the percentage of recurring revenue lost due to customers who stopped generating recurring revenue.

The calculation follows this formula:

\text{Gross Churn Rate} = \frac{\text{Total Dollar Impact of Churn During the Period}}{\text{ARR at the Beginning of the Period}}

The system defines each value as follows:

ARR at the Beginning of the Period The total recurring revenue from all active customers at the start of the reporting period.
Total Dollar Impact of Churn The recurring revenue lost from customers whose recurring revenue dropped to zero during the period.

This metric reflects revenue lost from fully churned customers only.

Customer Churn Rate measures the percentage of customers who stopped generating recurring revenue during the period.

The calculation follows this formula:

\text{Customer Churn Rate} = \frac{\text{Customers Who Churned During the Period}}{\text{Total Customers at the Beginning of the Period}} \times 100

The system defines each value as follows:

Total Customers at the Beginning of the Period The number of active customers at the start of the reporting period.
Customers Who Churned Customers whose recurring revenue dropped to zero during the period.

This metric is based on customer count rather than revenue value.

Rillet evaluates churn by comparing each customer’s recurring revenue from one period to the next.

A customer is classified as churned when:

Only customers who completely stop generating recurring revenue are classified as churn.

Rillet applies additional logic to prevent temporary billing gaps from being classified as churn.

The system applies the following rules:

If recurring revenue continues into the next period, changes are classified as contraction or expansion rather than churn and reactivation.
You can enable a configuration option to classify churn only when a contract has been formally terminated.
When importing usage-based invoices from Stripe, churn impact is limited to the month of usage to prevent retroactive changes to prior periods.

These rules determine how churn is calculated and displayed in the report.