B2B SaaS Churn Rate Benchmarks by Company Size
There is no single churn benchmark for B2B SaaS, so compare yourself with companies that charge a similar contract size. In SaaS Capital’s 2025 survey of private B2B SaaS companies, median gross revenue retention was 90% to 91% at every contract size up to $250k a year, which is about 9% to 10% annual revenue churn. Above $250k it was 95%, or about 5% churn.
| Annual contract value (ACV) | Median gross revenue retention | Annual gross revenue churn | Median net revenue retention |
|---|---|---|---|
| Under $12k | 90% | About 10% | 98% |
| $12k to $25k | 91% | About 9% | 103% |
| $25k to $50k | 91% | About 9% | 102% |
| $50k to $100k | 90% | About 10% | 104% |
| $100k to $250k | 91% | About 9% | 102% |
| Over $250k | 95% | About 5% | 106% |
Source: SaaS Capital, 2025 SaaS Retention Benchmarks for Private B2B Companies, published September 18, 2025. Retention is measured from December 2023 to December 2024, and the sample covers companies with more than $1M in annual recurring revenue (ARR). Churn is 100% minus gross retention.
Table of Contents
- How to Calculate Churn Rate SaaS
- What is Churn Rate in SaaS?
- Net SaaS Churn Rate
- Revenue Churn Rate
- Monthly Recurring Revenue/Subscription Revenue
- Monthly vs Annual Churn Rate
- What is a good churn rate for SaaS?
- What is the best metric for benchmarking churn
- Factors Affecting Churn Rate Benchmarks in SaaS Companies
- B2B SaaS Churn Rate Benchmarks & Challenges
- FAQs
- The Bottom Line
Every benchmark in this article names its source, sample and period, so you can judge how closely it matches your own business. As churn specialists at Churnfree, we see the same pattern again and again: a churn number only means something next to the right peer group. Once you know where you stand, our guide on how to reduce your churn rate covers what to do next.
How to Calculate Churn Rate SaaS
Customer churn rate (also called logo churn) is the share of customers you had at the start of a period who cancelled or did not renew during that period.
Customer churn rate = Customers lost during the period / Customers at the start of the period x 100
For example, if you start the month with 1,000 customers and 80 cancel, your monthly customer churn rate is 8%. Count only customers who were with you at the start of the period. Customers who sign up and cancel inside the same month should be left out, or they will distort the rate.
What is Churn Rate in SaaS?
In SaaS, churn rate measures how quickly customers or revenue leave your business over a set period, usually a month or a year. It is the opposite of retention: a 10% annual churn rate is the same as 90% annual retention.
SaaS companies track churn in three main ways:
| Metric | What it counts | Best for |
|---|---|---|
| Customer (logo) churn | Customers who cancel or do not renew | Spotting product, onboarding and fit problems |
| Gross revenue churn | Recurring revenue lost to cancellations and downgrades | Comparing yourself with published benchmarks |
| Net revenue churn | Revenue lost minus expansion from existing customers | Seeing whether upsells make up for lost revenue |
Customer churn and revenue churn can differ a lot. If your largest accounts stay and small ones leave, revenue churn will be lower than customer churn. If a few large accounts leave, it will be higher.
Net SaaS Churn Rate
Net churn usually refers to revenue, not customer counts. It takes the revenue you lost from existing customers and subtracts the extra revenue those same customers added through upgrades, add-ons and price increases.
Net revenue churn = (Churned revenue + Downgrade revenue - Expansion revenue) / Revenue at the start of the period x 100
For example, if you start the month with $100,000 in MRR, lose $5,000 to cancellations and $1,000 to downgrades, and gain $3,000 from upgrades, your net revenue churn is 3% (($5,000 + $1,000 - $3,000) / $100,000).
Net churn can be negative. That happens when expansion revenue is larger than the revenue you lost, and it is the same as net revenue retention above 100%.
Do not subtract new customers from churned customers to get a “net” churn figure. New sales hide the churn problem instead of measuring it, so the result cannot be compared with any benchmark.
Revenue Churn Rate
Gross revenue churn measures the share of recurring revenue lost to cancellations, downgrades and failed payments, before you count any expansion.
- Take revenue at the start: recurring revenue from existing customers at the start of the period.
- Add up revenue lost: cancellations, downgrades and subscriptions lost to failed payments during the period.
- Divide and multiply by 100: revenue lost divided by starting revenue.
For example, if your recurring revenue was $1,000,000 at the start of the year and you lost $100,000 of it, your annual gross revenue churn rate is 10%, which is the same as 90% gross revenue retention.
Gross revenue churn is the figure most published benchmarks use, because it cannot be flattered by upsells. SaaS Capital measures retention in revenue terms for this reason, and describes churn as 100% minus gross retention.
Monthly Recurring Revenue/ Subscription Revenue
Most SaaS companies bill monthly, so they track churn against monthly recurring revenue (MRR). The formula below gives net MRR churn, because it subtracts expansion MRR.
If you bill annually, use the same formula with annual recurring revenue (ARR) and a 12-month period.
To see gross MRR churn, leave expansion MRR out of the formula. Tracking both tells you how much revenue you lose and how much of it your existing customers win back through upgrades. You can go further with gross and net retention and logo retention.
Related Read: Benefits of MRR
Monthly vs Annual Churn Rate
Monthly Churn Rate
Monthly churn is the rate to watch if most of your customers pay month to month. It reacts quickly, so you can see the effect of an onboarding change or a new cancel flow within a few weeks.
Annual Churn Rate
Annual churn is not 12 times monthly churn, because each month’s churn applies to a smaller customer base. Use this formula to convert:
Annual churn = 1 - (1 - monthly churn)^12
| Monthly churn | Annual churn |
|---|---|
| 0.5% | About 5.8% |
| 1% | About 11.4% |
| 2% | About 21.5% |
| 3% | About 30.6% |
| 5% | About 46.0% |
| 8% | About 63.2% |
Going the other way, 5% annual churn is about 0.43% a month, 10% is about 0.87% and 20% is about 1.84%. When you compare yourself with a benchmark, check whether it is monthly or annual first. Mixing the two is the most common reason a churn rate looks far better or far worse than it is.
What is a good churn rate for SaaS?
A good churn rate is one that beats the median for companies with a similar contract size. A 5% monthly churn rate would be a serious problem for an enterprise tool but can be normal for a low-priced tool sold to freelancers.
Churn benchmarks by contract size
SaaS Capital’s 2025 survey is the most useful current benchmark for private B2B SaaS because it splits results by annual contract value. The table at the top of this article shows the full breakdown. The main points:
- Median gross revenue retention sits at 90% to 91% for every contract size up to $250k a year, so a typical B2B SaaS company loses about 9% to 10% of its recurring revenue a year before expansion.
- Median net revenue retention rises with contract size, from 98% for contracts under $12k a year to 106% above $250k.
- For companies with contracts of $25k to $50k a year, median net revenue retention was 102%, with the top quartile at 111% and the bottom quartile at 97%.
Enterprise SaaS churn rate
Enterprise contracts churn the least. In the same survey, companies with contracts above $250k a year had median gross revenue retention of 95%, about 5% annual revenue churn, and median net revenue retention of 106%. SaaS Capital links this to longer sales cycles, in-depth implementation and dedicated account management.
B2B vs B2C SaaS
ChartMogul’s December 2025 retention report analysed about 3,500 software companies and looked at 2025 retention for those with at least $250k ARR. Median net revenue retention was 82% for B2B SaaS (upper quartile 97%) and 49% for B2C SaaS. ChartMogul’s sample includes much smaller companies than SaaS Capital’s, which only covers companies above $1M ARR. That is one reason the two medians differ, and a reason to compare yourself with the dataset that looks most like your business.
Why published churn averages disagree
You will find many different “average SaaS churn rates” online. They differ because they measure different things: customers or revenue, monthly or annual, gross or net, small or large companies. Before you compare your number with an average, check what it measures and who is in the sample. If a source does not say, do not use it as a benchmark.
Related Read: Average Churn rate for subscription services
Above these benchmarks? Churnfree puts a cancellation flow in front of every customer who clicks cancel, with a pause option or a retention offer, and records why they leave. Start your 14-day free trial, no credit card required.
What is the best metric for benchmarking churn
For B2B SaaS, the best metric is gross revenue retention compared with companies of a similar annual contract value. SaaS Capital calls contract value the best starting point for retention benchmarks, ahead of company age, revenue or industry, and treats revenue retention as the most important retention metric. Track customer churn as well, since it shows problems that revenue figures can hide.
Related Read: Gross vs Net Retention
Factors Affecting Churn Rate Benchmarks in SaaS Companies
Voluntary vs. Involuntary Churn
1. Voluntary churn: the customer decides to cancel, often because of missing features, poor support, weak onboarding or a better offer from a competitor.
2. Involuntary churn: the subscription ends because a payment fails, for example an expired card or insufficient funds. It says nothing about how the customer feels about your product, and dunning emails, smart payment retries and card updaters can recover a lot of it.
Contract size
Higher-priced products churn less. They usually come with longer sales cycles, more implementation work and dedicated support, which makes them harder to replace. This is why SaaS Capital’s retention figures improve at the top contract sizes.
Billing term
Annual plans give customers more time to adopt the product before they can leave. ChartMogul reports that median net revenue retention is 10 to 20 percentage points higher for annual plans than for monthly ones.
Who you sell to
B2B products are usually built into a customer’s daily work and are bought after a longer evaluation, so they churn less than consumer products, as ChartMogul’s B2B and B2C figures above show.
B2B SaaS Churn Rate Benchmarks & Challenges
Knowing the causes of customer churn matters as much as knowing the benchmark. These are the areas where B2B SaaS companies most often struggle.
Churn happens when businesses fail to know users’ behavior patterns.
Customers rarely cancel without warning. Falling logins, fewer active seats, support tickets that stay open and visits to the billing page all tend to come before a cancellation. If you do not track these signals, the first sign of churn is the cancellation itself.
What do your users actually want?
Ask them, and ask at the moment it matters most. A short exit survey in the cancellation flow tells you why customers leave in their own words, and a well-timed offer such as a discount, a downgrade or a pause can keep customers who only needed a break. Pair this with the customer retention strategies that fit your segment.
How to track user behavior patterns successfully?
Three things matter most: the right data, the right triggers and the right methods to scale.
1. Getting the correct data (not more data)
Start with a small set of signals that clearly relate to churn in your product, such as usage frequency, feature adoption and cancellation reasons. More data does not help if nobody acts on it.
Churnfree helps with the cancellation side of this. You can build a cancel flow that collects feedback from customers who want to leave, shows each of them the offer you matched to the reason they give, and lets them pause their subscription instead of cancelling. The dashboard shows which reasons and offers come up most, so you can fix the causes.
Metrics such as customer lifetime value help you decide which customers are worth the most effort to keep.
2. Determining the right triggers for successful user contact
Find the events that come before churn in your product and contact customers when they happen. Examples include a sharp drop in usage, a failed payment, a visit to the cancellation page or an unanswered support ticket. The earlier you reach out, the more options you have.
3. Using the correct methods and tech to scale up successfully
Many B2B SaaS companies run a few successful retention campaigns and then stall. To scale, automate the triggers and messages that work, keep your customer data up to date, and give customer success and sales the same view of each account.
FAQs
1. What is a good churn rate for SaaS?
A good churn rate is one below the median for companies with a similar contract size. In SaaS Capital’s 2025 survey of private B2B SaaS companies, median annual gross revenue churn was about 9% to 10% for contracts up to $250k a year and about 5% above $250k.
2. What is the average churn rate for SaaS companies?
There is no single reliable average, because published figures mix monthly and annual rates, customer and revenue churn, and very different company sizes. For private B2B SaaS companies above $1M ARR, SaaS Capital’s 2025 median gross revenue retention of 90% to 91% (for contracts up to $250k) equals about 9% to 10% annual revenue churn.
3. What is a typical enterprise SaaS churn rate?
In SaaS Capital’s 2025 survey, companies with contracts above $250k a year had median gross revenue retention of 95%, or about 5% annual revenue churn, and median net revenue retention of 106%.
4. How do I convert monthly churn to annual churn?
Use annual churn = 1 - (1 - monthly churn)^12. For example, 2% monthly churn is about 21.5% a year, not 24%, and 3% monthly churn is about 30.6% a year.
5. What is a good benchmark for SaaS gross churn rate?
Compare your annual gross revenue churn with SaaS Capital’s medians for your contract size: about 9% to 10% for contracts up to $250k a year and about 5% above $250k. Beating the median for your contract size is a sensible first target.
6. What is a good benchmark for SaaS logo churn rate?
Current primary research focuses on revenue retention, so there is no reliable current logo churn benchmark for B2B SaaS as a whole. Track your own customer churn by segment and billing term, and compare it with your gross revenue churn. A large gap between the two tells you whether small or large accounts are the ones leaving.
7. Why is my B2B SaaS churn rate 8% when the industry average is 3.5%?
First check that you are comparing like with like. The 3.5% figure is quoted widely, but sources disagree on whether it is monthly or annual, and whether it counts customers or revenue. 8% monthly churn is about 63% a year and is high for almost any B2B product. 8% annual revenue churn is close to SaaS Capital’s median for contracts up to $250k a year.
8. What does a 20% churn rate mean?
It means you lost 20% of the customers or revenue you had at the start of the period. As an annual rate, 20% is about 1.84% a month. As a monthly rate, it means losing most of your customers within a year.
9. What retention rate should B2B SaaS businesses aim for?
Aim to beat the median for your contract size. In SaaS Capital’s 2025 survey, median gross revenue retention was 90% to 91% up to $250k a year and 95% above it, and median net revenue retention ranged from 98% for contracts under $12k a year to 106% above $250k.
The Bottom Line
Churn benchmarks only help when you compare like with like: the same metric, the same period and companies with a similar contract size. Measure both customer churn and gross revenue churn, check where you sit against SaaS Capital’s medians for your contract size, and then work on the causes.
A churn management software like Churnfree helps with the last step. It turns cancellations into a chance to learn why customers leave and to offer them a reason to stay.
