Source: https://www.revvly.ai/glossary/contraction-mrr

[Glossary](https://www.revvly.ai/glossary)

# Contraction MRR

**Contraction MRR is the monthly recurring revenue lost when existing customers downgrade, remove seats or reduce usage while remaining customers. It does not appear in logo churn, which makes it an easy early signal to miss, but it often precedes full cancellation.**

## Formula

`Contraction MRR = sum of negative MRR changes on active subscriptions in the period`

## How to read it

Report contraction as a positive magnitude in its own line of the MRR movement. Watching it by cohort and by plan shows which segments are quietly shrinking before they churn.

## In Revvly

- [Docs: reference metrics](https://www.revvly.ai/docs/reference/metrics)

## Further reading

- [Contraction MRR: what causes it and how to stop it compounding](https://www.revvly.ai/blog/contraction-mrr-early-warning-signal)

## Related terms

- [Expansion MRR](https://www.revvly.ai/glossary/expansion-mrr)
- [Net revenue retention (NRR)](https://www.revvly.ai/glossary/nrr)
- [Gross revenue retention (GRR)](https://www.revvly.ai/glossary/grr)

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