Business review · fictional case
Q3 FY26 business review
Revenue is up. SMB churn is the signal. The ask is a decision.
Lumen · Executive team · October 2026
Headline
Revenue +18%, but SMB churn doubled after the pricing change
$48.2MARR, +18% YoY
112%NRR, down from 121%
4.8%SMB monthly churn, up from 2.2%
14 moCAC payback, up from 11
KPI dashboard
Plan versus actual
| Metric | Plan | Actual | Variance |
|---|---|---|---|
| New ARR | $6.2M | $6.8M | +$0.6M |
| Gross margin | 80% | 81% | +1 pt |
| SMB churn | 2.8% | 4.8% | −2 pt |
| CAC payback | 12 mo | 14 mo | −2 mo |
Drivers
Three drivers explain the variance
SMB churn
Pricing change raised the entry tier 22%; churn concentrated in accounts under $6k ACV.
Enterprise expansion
New ARR beat plan, but the sales cycle lengthened by 19 days.
Services mix
Implementation revenue grew faster than subscription, lowering blended margin.
Driver 1
Churn is a pricing-packaging problem, not a product problem
| Cohort | Churn | Reason | Action |
|---|---|---|---|
| Under $6k ACV | 7.1% | Price increase; low usage | Reintroduce a starter tier |
| $6k–$20k | 2.3% | Stable | Monitor |
| Over $20k | 0.9% | Expansion | Double down |
Driver 2
Enterprise is working; the cycle is the constraint
What worked
New ARR +$0.6M; 3 logos over $250k; NRR 128% in enterprise.
What slowed
Security review added 19 days; two deals slipped into Q4.
Actions
Four actions, each with an owner and a date
| Action | Owner | Due | Measure |
|---|---|---|---|
| Starter tier relaunch | Product | 15 Nov | SMB churn ≤ 3.0% |
| Security review playbook | Sales eng | 8 Nov | Cycle −10 days |
| Low-usage churn play | CS | 30 Nov | Save rate ≥ 35% |
| Services margin review | Finance | 22 Nov | Blended margin ≥ 80% |
Asks
Three decisions from this room
Headcount
2 CS roles to run the low-usage save play.
Pricing exception
Approve a starter tier below the current floor.
Board intro
Two enterprise security leaders for the review playbook.
Next quarter
What we will watch
3.0%SMB monthly churn target
115%NRR target
12 moCAC payback target
80%Gross margin floor
Appendix · Q&A
Backup
- Cohort tables and definitions
- Pipeline by segment and slip reason
- Services margin bridge
- Written one-pager and decision log