Logo Churn ARR
Growth
Industry:
SaaS
Short Definition
Logo Churn ARR is the annual recurring revenue lost when a customer fully cancels and the account goes to $0 in the period. It is counted on the effective end date (when service stops), not when notice is given.
Short Definition
Logo Churn ARR is the annual recurring revenue lost when a customer fully cancels and the account goes to $0 in the period. It is counted on the effective end date (when service stops), not when notice is given.
Short Definition
Logo Churn ARR is the annual recurring revenue lost when a customer fully cancels and the account goes to $0 in the period. It is counted on the effective end date (when service stops), not when notice is given.
Why it matters for Investors
Retention risk: Losing whole accounts shrinks your recurring base.
Profitability concern: Logo churn reduces ARR (and future cash flow), often squeezing margins.
Growth balance: It offsets gains from New Logo and Expansion ARR—track the trend to see if the base is net growing or shrinking.
Why it matters for Investors
Retention risk: Losing whole accounts shrinks your recurring base.
Profitability concern: Logo churn reduces ARR (and future cash flow), often squeezing margins.
Growth balance: It offsets gains from New Logo and Expansion ARR—track the trend to see if the base is net growing or shrinking.
Why it matters for Investors
Retention risk: Losing whole accounts shrinks your recurring base.
Profitability concern: Logo churn reduces ARR (and future cash flow), often squeezing margins.
Growth balance: It offsets gains from New Logo and Expansion ARR—track the trend to see if the base is net growing or shrinking.
Formula
Practical considerations:
Scope: Count only full cancellations to $0 (account leaves entirely). Seat cuts, tier downgrades, or price cuts are not logo churn—they’re Contraction.
Timing: Record churn on the effective end date (when service actually stops). A cancellation notice doesn’t count yet.
Future-dated cancellations: Keep the ARR until the end date; don’t remove it early.
Reversals: If the customer rescinds the cancellation before the end date, record nothing. If they cancel and later return, book it as New Logo ARR (or Reactivation if you track it).
Overlap with contraction: If an account down-sells/reduces first and then cancels in the same period, show both: the Contraction first, then Logo Churn to $0.
One-offs: Ignore refunds, credits, and other non-recurring items—logo churn tracks the recurring contract going to zero.
Formula
Practical considerations:
Scope: Count only full cancellations to $0 (account leaves entirely). Seat cuts, tier downgrades, or price cuts are not logo churn—they’re Contraction.
Timing: Record churn on the effective end date (when service actually stops). A cancellation notice doesn’t count yet.
Future-dated cancellations: Keep the ARR until the end date; don’t remove it early.
Reversals: If the customer rescinds the cancellation before the end date, record nothing. If they cancel and later return, book it as New Logo ARR (or Reactivation if you track it).
Overlap with contraction: If an account down-sells/reduces first and then cancels in the same period, show both: the Contraction first, then Logo Churn to $0.
One-offs: Ignore refunds, credits, and other non-recurring items—logo churn tracks the recurring contract going to zero.
Formula
Practical considerations:
Scope: Count only full cancellations to $0 (account leaves entirely). Seat cuts, tier downgrades, or price cuts are not logo churn—they’re Contraction.
Timing: Record churn on the effective end date (when service actually stops). A cancellation notice doesn’t count yet.
Future-dated cancellations: Keep the ARR until the end date; don’t remove it early.
Reversals: If the customer rescinds the cancellation before the end date, record nothing. If they cancel and later return, book it as New Logo ARR (or Reactivation if you track it).
Overlap with contraction: If an account down-sells/reduces first and then cancels in the same period, show both: the Contraction first, then Logo Churn to $0.
One-offs: Ignore refunds, credits, and other non-recurring items—logo churn tracks the recurring contract going to zero.
Worked Example
Starting ARR (Feb 28): $1,200,000
Period: March (snapshot Mar 31)
Account | Event | Effective by Mar 31? | Account ARR @ Mar-31 ($) | Δ ARR in March ($) | Category | Notes |
|---|---|---|---|---|---|---|
A | New logo, annual $24,000, starts Mar 4 | Yes | $24,000 | +$24,000 | New Logo | Not Logo Churn |
B | New logo, annual $36,000, starts Apr 1 | No | $0 | $0 | Booking / CARR | Signed, starts next month |
C | Upsell on existing (+$18,000) eff. Mar 15 (prior $50,000) | Yes | $68,000 ($50,000 → $68,000) | +$18,000 | Expansion | Not Logo Churn |
D | Cancellation effective Mar 31 (prior $40,000) | Yes | $0 | −$40,000 | Logo Churn | Account to $0 |
E | Year-2 ramp $20,000 → $35,000 on Mar 1 | Yes | $35,000 | +$15,000 | Expansion (ramp) | Not Logo Churn |
Logo Churn ARR (March): $40,000 = $40,000 (D)
ARR Bridge (March):
New Logo ARR: +$24,000 (A)
Expansion ARR: +$33,000 (C + E)
Contraction ARR: $0
Logo Churn ARR: −$40,000 (D)
Net New ARR: $24,000 + $33,000 − $40,000 = +$17,000
Ending ARR (Mar 31): $1,200,000 + $17,000 = $1,217,000
Notes:
Only D counts as Logo Churn (the customer fully canceled and went to $0).
A, C, and E are not churn events; B is signed-not-live (sits in CARR until start).
Count churn on the effective end date (service stops), not when notice is given.
Partial losses (fewer seats, lower price, module removal) are Contraction (Down-sell/Reduction), not Logo Churn.
If a churned customer returns later, treat that as a Reactivation (or New Logo, depending on your framework)—it is not a reversal of past churn.
Worked Example
Starting ARR (Feb 28): $1,200,000
Period: March (snapshot Mar 31)
Account | Event | Effective by Mar 31? | Account ARR @ Mar-31 ($) | Δ ARR in March ($) | Category | Notes |
|---|---|---|---|---|---|---|
A | New logo, annual $24,000, starts Mar 4 | Yes | $24,000 | +$24,000 | New Logo | Not Logo Churn |
B | New logo, annual $36,000, starts Apr 1 | No | $0 | $0 | Booking / CARR | Signed, starts next month |
C | Upsell on existing (+$18,000) eff. Mar 15 (prior $50,000) | Yes | $68,000 ($50,000 → $68,000) | +$18,000 | Expansion | Not Logo Churn |
D | Cancellation effective Mar 31 (prior $40,000) | Yes | $0 | −$40,000 | Logo Churn | Account to $0 |
E | Year-2 ramp $20,000 → $35,000 on Mar 1 | Yes | $35,000 | +$15,000 | Expansion (ramp) | Not Logo Churn |
Logo Churn ARR (March): $40,000 = $40,000 (D)
ARR Bridge (March):
New Logo ARR: +$24,000 (A)
Expansion ARR: +$33,000 (C + E)
Contraction ARR: $0
Logo Churn ARR: −$40,000 (D)
Net New ARR: $24,000 + $33,000 − $40,000 = +$17,000
Ending ARR (Mar 31): $1,200,000 + $17,000 = $1,217,000
Notes:
Only D counts as Logo Churn (the customer fully canceled and went to $0).
A, C, and E are not churn events; B is signed-not-live (sits in CARR until start).
Count churn on the effective end date (service stops), not when notice is given.
Partial losses (fewer seats, lower price, module removal) are Contraction (Down-sell/Reduction), not Logo Churn.
If a churned customer returns later, treat that as a Reactivation (or New Logo, depending on your framework)—it is not a reversal of past churn.
Worked Example
Starting ARR (Feb 28): $1,200,000
Period: March (snapshot Mar 31)
Account | Event | Effective by Mar 31? | Account ARR @ Mar-31 ($) | Δ ARR in March ($) | Category | Notes |
|---|---|---|---|---|---|---|
A | New logo, annual $24,000, starts Mar 4 | Yes | $24,000 | +$24,000 | New Logo | Not Logo Churn |
B | New logo, annual $36,000, starts Apr 1 | No | $0 | $0 | Booking / CARR | Signed, starts next month |
C | Upsell on existing (+$18,000) eff. Mar 15 (prior $50,000) | Yes | $68,000 ($50,000 → $68,000) | +$18,000 | Expansion | Not Logo Churn |
D | Cancellation effective Mar 31 (prior $40,000) | Yes | $0 | −$40,000 | Logo Churn | Account to $0 |
E | Year-2 ramp $20,000 → $35,000 on Mar 1 | Yes | $35,000 | +$15,000 | Expansion (ramp) | Not Logo Churn |
Logo Churn ARR (March): $40,000 = $40,000 (D)
ARR Bridge (March):
New Logo ARR: +$24,000 (A)
Expansion ARR: +$33,000 (C + E)
Contraction ARR: $0
Logo Churn ARR: −$40,000 (D)
Net New ARR: $24,000 + $33,000 − $40,000 = +$17,000
Ending ARR (Mar 31): $1,200,000 + $17,000 = $1,217,000
Notes:
Only D counts as Logo Churn (the customer fully canceled and went to $0).
A, C, and E are not churn events; B is signed-not-live (sits in CARR until start).
Count churn on the effective end date (service stops), not when notice is given.
Partial losses (fewer seats, lower price, module removal) are Contraction (Down-sell/Reduction), not Logo Churn.
If a churned customer returns later, treat that as a Reactivation (or New Logo, depending on your framework)—it is not a reversal of past churn.
Best Practices
Keep a 30/60/90-day risk list: List accounts likely to cancel, assign an owner, and note the next action.
Capture one clear reason: For every churn, tag a simple reason (e.g., budget, low usage, price, missing feature, champion left, vendor consolidation) and add a one-line note on what happened and what might have saved it.
Run exit conversations: Do a quick exit interview or survey; record what could’ve saved the account.
Use early-warning signals: Watch for sharp usage drops, unpaid invoices, low NPS, major support issues, or contracts ending within 60 days.
Offer save options: Try plan right-sizing, temporary pauses/credits with end dates, training to boost adoption, or migration help—track outcomes.
Review by cohort and segment: Look at logo churn by customer size, plan, region, and start-date cohort to spot patterns.
Report cleanly in the ARR waterfall: Show Logo Churn separately from Contraction and call out any Reactivations.
Close the loop with Product/ Customer Success: Share the top churn reasons monthly and agree on fixes (feature roadmap, onboarding changes, pricing tweaks).
Best Practices
Keep a 30/60/90-day risk list: List accounts likely to cancel, assign an owner, and note the next action.
Capture one clear reason: For every churn, tag a simple reason (e.g., budget, low usage, price, missing feature, champion left, vendor consolidation) and add a one-line note on what happened and what might have saved it.
Run exit conversations: Do a quick exit interview or survey; record what could’ve saved the account.
Use early-warning signals: Watch for sharp usage drops, unpaid invoices, low NPS, major support issues, or contracts ending within 60 days.
Offer save options: Try plan right-sizing, temporary pauses/credits with end dates, training to boost adoption, or migration help—track outcomes.
Review by cohort and segment: Look at logo churn by customer size, plan, region, and start-date cohort to spot patterns.
Report cleanly in the ARR waterfall: Show Logo Churn separately from Contraction and call out any Reactivations.
Close the loop with Product/ Customer Success: Share the top churn reasons monthly and agree on fixes (feature roadmap, onboarding changes, pricing tweaks).
Best Practices
Keep a 30/60/90-day risk list: List accounts likely to cancel, assign an owner, and note the next action.
Capture one clear reason: For every churn, tag a simple reason (e.g., budget, low usage, price, missing feature, champion left, vendor consolidation) and add a one-line note on what happened and what might have saved it.
Run exit conversations: Do a quick exit interview or survey; record what could’ve saved the account.
Use early-warning signals: Watch for sharp usage drops, unpaid invoices, low NPS, major support issues, or contracts ending within 60 days.
Offer save options: Try plan right-sizing, temporary pauses/credits with end dates, training to boost adoption, or migration help—track outcomes.
Review by cohort and segment: Look at logo churn by customer size, plan, region, and start-date cohort to spot patterns.
Report cleanly in the ARR waterfall: Show Logo Churn separately from Contraction and call out any Reactivations.
Close the loop with Product/ Customer Success: Share the top churn reasons monthly and agree on fixes (feature roadmap, onboarding changes, pricing tweaks).
FAQs
How does Churn ARR affect Net Revenue Retention (NRR)?
It pulls NRR down because it’s subtracted in the NRR math: NRR = (Start ARR + Expansion − Contraction − Logo Churn) ÷ Start ARR. More logo churn → lower NRR.What is included in Logo Churn ARR?
The ARR from customers that fully cancel and go to $0 effective in the period.Can Logo Churn ARR increase?
Yes—relative to prior periods. It goes up when more (or larger-ARR) customers cancel in the period, and down when fewer (or smaller-ARR) customers cancel.How are partial churns handled?
Those aren’t logo churn. Price/seat/tier reductions from customers who stay are Contraction ARR, not Logo Churn ARR.Is it the same as Churn ARR?
No. Churn ARR typically means Logo Churn ARR + Contraction ARR. We show them separately to make drivers clear.What if a contract is reinstated?
If the customer restarts in the same period, net the churn to $0. If they return in a later period, book it then (usually as Reactivation/New Logo per your rules)—don’t backdate.
FAQs
How does Churn ARR affect Net Revenue Retention (NRR)?
It pulls NRR down because it’s subtracted in the NRR math: NRR = (Start ARR + Expansion − Contraction − Logo Churn) ÷ Start ARR. More logo churn → lower NRR.What is included in Logo Churn ARR?
The ARR from customers that fully cancel and go to $0 effective in the period.Can Logo Churn ARR increase?
Yes—relative to prior periods. It goes up when more (or larger-ARR) customers cancel in the period, and down when fewer (or smaller-ARR) customers cancel.How are partial churns handled?
Those aren’t logo churn. Price/seat/tier reductions from customers who stay are Contraction ARR, not Logo Churn ARR.Is it the same as Churn ARR?
No. Churn ARR typically means Logo Churn ARR + Contraction ARR. We show them separately to make drivers clear.What if a contract is reinstated?
If the customer restarts in the same period, net the churn to $0. If they return in a later period, book it then (usually as Reactivation/New Logo per your rules)—don’t backdate.
FAQs
How does Churn ARR affect Net Revenue Retention (NRR)?
It pulls NRR down because it’s subtracted in the NRR math: NRR = (Start ARR + Expansion − Contraction − Logo Churn) ÷ Start ARR. More logo churn → lower NRR.What is included in Logo Churn ARR?
The ARR from customers that fully cancel and go to $0 effective in the period.Can Logo Churn ARR increase?
Yes—relative to prior periods. It goes up when more (or larger-ARR) customers cancel in the period, and down when fewer (or smaller-ARR) customers cancel.How are partial churns handled?
Those aren’t logo churn. Price/seat/tier reductions from customers who stay are Contraction ARR, not Logo Churn ARR.Is it the same as Churn ARR?
No. Churn ARR typically means Logo Churn ARR + Contraction ARR. We show them separately to make drivers clear.What if a contract is reinstated?
If the customer restarts in the same period, net the churn to $0. If they return in a later period, book it then (usually as Reactivation/New Logo per your rules)—don’t backdate.
Related Metrics
Commonly mistaken for:
Contraction ARR (customer stays but pays less; partial reduction)
Total ARR (snapshot of all active recurring revenue; not a loss metric)
Churn Rate (a percentage; Logo Churn ARR is a dollar amount)
Related Metrics
Commonly mistaken for:
Contraction ARR (customer stays but pays less; partial reduction)
Total ARR (snapshot of all active recurring revenue; not a loss metric)
Churn Rate (a percentage; Logo Churn ARR is a dollar amount)
Related Metrics
Commonly mistaken for:
Contraction ARR (customer stays but pays less; partial reduction)
Total ARR (snapshot of all active recurring revenue; not a loss metric)
Churn Rate (a percentage; Logo Churn ARR is a dollar amount)
Source of:
Index