Revenue Churn Metrics

This question tests whether candidates understand the core SaaS revenue retention metrics and the logic behind them. In particular, it focuses on how to think about revenue lost from customers who leave, how to relate that loss to the prior period’s recurring revenue base, and how to adjust for revenue expansion from existing customers. Interviewers ask this kind of question because SaaS valuation and operating analysis depend heavily on recurring revenue quality, customer retention, and the difference between gross churn and net churn. A strong answer shows that you can interpret the metric definitions correctly, understand what belongs in the numerator and denominator, and explain why these measures matter for assessing the durability of a subscription business.