In this workout, we're going to calculate the unit churn rate and the gross revenue churn. We're given information on the next four quarters, starting with the number of new customers. As you can see here, the number of new customers in Q1 is 2,400, and the number goes up significantly over the next three quarters. We're also provided with the number of customers lost each quarter, and that of course, is gonna give us the number of customers at the end of each of these periods. We also have assumptions on the percentage of customers that are generated from marketing campaigns, as well as other assumptions related to our future revenue and future sales and marketing expenses. So let's begin by calculating the unit churn per quarter, and that's simply gonna be calculated as the number of customers lost in any given quarter, divided by the number of customers at the end of the prior period or the prior quarter. In this case, it would be 98,500. I'm gonna multiply this times negative one to come up with a positive churn here, and the number is 1.015%.

Now let's compute the gross recurring revenue churn, and that would simply be computed as the number of customers lost times the SaaS price per customer. So in Q1, that would be 1000 customers times $125 per customer, so the revenue churn would be $125,000.

Now finally, let's take both of these formulas and copy them across all four quarters.

And as we can see here, the unit churn starts at 1.015%. It goes up slightly over the next two quarters, and then it comes back down in Q4. On the other hand, our revenue churn is going up across all four quarters, and that's simply because the number of customers lost, as you can see here, is going up by about a hundred customers each quarter.