What is a good churn rate for SaaS in 2026?

A good monthly churn rate depends on your stage: Micro companies should target under 5%, startups 3–5%, growth-stage 1.5–3%, and scale/enterprise under 1.5%. Annual churn should be under 20% for healthy companies. Anything above 7% monthly churn is concerning regardless of stage.

What's the difference between customer churn and revenue churn?

Customer churn measures the percentage of customers lost. Revenue churn measures the percentage of MRR/ARR lost. A company can have low customer churn (losing few customers) but high revenue churn if losing high-value customers. Net revenue churn subtracts expansion revenue from gross churn.

How does churn affect SaaS valuation?

Churn directly impacts valuation multiples. Companies with lower churn command higher revenue multiples because growth is more predictable. A company with 5% monthly churn growing 20% monthly might actually be shrinking in net terms. Investors focus on net revenue churn as a key health indicator.

What's a healthy net revenue churn rate?

Negative net revenue churn (expansion exceeds churn) is the holy grail — it means you're growing even without new customer acquisition. Most healthy SaaS companies target net revenue churn under 5%. Anything above 10% means you're heavily dependent on new customer acquisition to grow.

How do I calculate the impact of churn on my MRR?

Use this formula: MRR at end of period = MRR at start + New MRR – Expansion MRR – Churned MRR. For example: $100K start + $20K new – $5K expansion – $8K churn = $107K end MRR. Our MRR Calculator can project this forward to show long-term impact.

SaaS

What Is a Good Churn Rate for SaaS? 2026 Benchmarks + Calculator

April 16, 2026 9 min read

Ryan Cole

Senior EcomCalcTools Analyst · Updated April 2026

★ Quick Answer

In 2026, a healthy SaaS churn rate is 5% monthly (Source: Statista SaaS Report 2026) (60% annual) or below for SMB products. Mid-market companies target 3% monthly, and enterprise SaaS should stay under 1% monthly. The median churn across all SaaS companies is approximately 7% monthly (Source: Statista 2026). Every 1% reduction in monthly churn increases ARR by approximately 12% annually. Reducing churn from 8% to 5% can more than double your SaaS valuation.

What Is a Good Churn Rate for SaaS? 2026 Benchmarks + Calculator

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