How to calculate Contraction MRR

Formula

Contraction MRR = sum of (old MRR − new MRR) for customers who downgraded to a lower, non-zero plan

SQL query

This example assumes: plan_changes(customer_id bigint, changed_at timestamptz, old_mrr numeric, new_mrr numeric). It is written in PostgreSQL syntax; date functions differ slightly in MySQL, BigQuery and SQLite, and your column names will differ from these.

SELECT DATE_TRUNC('month', changed_at)::date AS month,
       COUNT(DISTINCT customer_id) AS downgrading_customers,
       SUM(old_mrr - new_mrr) AS contraction_mrr
FROM plan_changes
WHERE new_mrr < old_mrr
  AND new_mrr > 0
GROUP BY 1
ORDER BY 1;

Common mistakes that make Contraction MRR wrong

• A change to zero is a cancellation and belongs in churned MRR, not here.
• Discounts and coupons that lower MRR are not always downgrades; check how your billing tool records them.
• Currency changes can look like contraction; convert to one currency first.

Ask for Contraction MRR in plain English

Instead of writing the query yourself, you can type the question. SchemaChat turns it into SQL against your connected database or uploaded file, runs it, and shows the SQL and the figures it used so you can check the answer before you share it. It does not replace your judgement about the definition: check that the query matches the formula your business uses.

• How much contraction MRR did we have each month this year?
• Which customers downgraded last quarter?