# Definitions **Churn** * **Theoretical Description**:\ Churn refers to the rate at which customers stop doing business with a company over a given period. It is often expressed as a percentage of total customers lost. * **Churned’s Standard Interpretation**:\ We define churn as a customer who has stopped engaging with the product/service for a period long enough to be considered inactive. The exact definition varies based on the business model (e.g., subscription cancellations for SaaS, no purchase for X months in e-commerce, or no engagement for Y days in media). * **Enrichment**: * Users are considered **churned** if they have canceled all active subscriptions and do not have a new contract starting within the next **7 days** after their latest contract has ended. * **End\_date** has been added to the subscription, and it is in the past. * **Alternative Interpretations**: * **Revenue churn**: Measures the percentage of revenue lost due to downgrades or cancellations. * **Logo churn**: Counts the number of distinct customers lost. * **Voluntary vs. involuntary churn**: Differentiates between customers who cancel intentionally and those lost due to failed payments. *** #### **MRR (Monthly Recurring Revenue)** * **Theoretical Description**:\ MRR represents the predictable revenue generated from active subscriptions on a monthly basis. It is a key metric for SaaS and subscription-based businesses. * **Churned’s Standard Interpretation**:\ We calculate MRR as the sum of all active subscription revenues normalized to a monthly basis, including expansions, contractions, and downgrades. One-time charges and usage-based fees are not included. * **Alternative Interpretations**: * **Gross MRR**: Includes all revenue, regardless of churn or downgrades. * **Net MRR**: Adjusts for expansion, contraction, and churn to reflect overall revenue stability. * **Contracted MRR**: Only includes revenue from fixed contracts, excluding usage-based billing. *** #### **ARR (Annual Recurring Revenue)** * **Theoretical Description**:\ ARR is the total expected recurring revenue for a full year, calculated based on active subscriptions. * **Churned’s Standard Interpretation**:\ ARR is calculated as **MRR × 12**, considering only recurring revenue. It excludes one-time charges and short-term promotions. * **Enrichment**: * Expected ARR is calculated by summing the **term\_payment\_allow\_renew\_days** for all currently **Active Customers**. * **Alternative Interpretations**: * **Committed ARR**: Only considers revenue from contracts signed for a minimum of 12 months. * **Run-rate ARR**: Annualizes the latest MRR without considering future expansions or contractions. * **Logo ARR**: Measures ARR from individual customers rather than total revenue. *** #### **Amount of Active Customers** * **Theoretical Description**:\ The total number of customers currently using a product or service. The definition of "active" can vary by business model. * **Churned’s Standard Interpretation**:\ We count active customers based on sustained engagement, such as: * SaaS: Customers with an active paid subscription. * Media: Users consuming content within a defined period. * E-commerce: Customers who have made a purchase in a set timeframe. * Charities: Donors who contributed in the past year. * **Enrichment**: * A user is considered **Active** if they have at least one active **subscription** where: * **Start\_date** is in the past * **End\_date** is in the future or does not exist * **Alternative Interpretations**: * **Billing-based activity**: Only counts customers who have been billed recently. * **Engagement-based activity**: Includes customers who interacted with the product but may not be paying. * **Rolling activity window**: Defines "active" based on engagement within X days instead of a static definition. *** #### **New Customers** * **Theoretical Description**:\ New customers refer to first-time buyers or subscribers within a given period. The definition can vary based on how a company tracks acquisitions. * **Churned’s Standard Interpretation**:\ We define a new customer as an individual or business that has made their first transaction, activated their account, or subscribed to a service for the first time. The tracking period is aligned with reporting cycles (e.g., monthly, quarterly). * **Enrichment**: * Users are considered **New Customers** if they have subscriptions where **Start\_date** falls within a specific month. * No filtering is applied to exclude test accounts or other internal records. * **Alternative Interpretations**: * **First-time revenue customers**: Only counts customers generating revenue for the first time. * **Trial-to-paid conversion**: Includes free trial users who convert into paying customers. * **New logo acquisition**: Focuses on acquiring new companies rather than individual users. * **Reactivated customers**: Some businesses count returning customers as "new" if they were inactive for a long period before repurchasing. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. 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