Do retention rate and churn rate always add up to 100 percent?

Only when both are computed on the same population, the same time window and the same definition of active. In practice they usually are not: churn is typically defined across the whole user base in a fixed range while retention is defined on a specific cohort, and users returning after the window closes push the two figures further apart.

Retention Rate

Intermediate

Updated Jul 11, 2026 Shahin editorial 2 min read

PronunciationEN/rɪˈtɛnʃən reɪt/

Retention rate is the percentage of a starting group of users who are still active by the end of a defined period and performed the return action.

Two different formulas share the same name in the industry, and that is where most of the confusion comes from. In product analytics the denominator is the cohort size at the moment it starts, and users acquired mid-window never enter the calculation at all. In subscription businesses, customer retention rate is usually computed as customers at the end minus new customers, divided by customers at the start, which describes accounts rather than a cohort. Before comparing two figures, confirm that both come from the same formula, the same window and the same definition of active.

How it is calculated

Retention rate = cohort users who performed the return action in the target period ÷ cohort size at the start × 100

The denominator is locked at the start of the cohort and is never re-based in later periods, which is why user retention rate can never exceed 100 percent, unlike net revenue retention, which can pass 100 through plan upgrades. The unit is a percentage, and cohorts whose target period has not fully elapsed must be excluded from the calculation.

How it is calculated

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