Instead of looking at cumulative totals or gross numbers such as total revenue and total number of customers, one looks at the performance of each group of customers that comes into contact with the product independently. Each group is called a cohort.
Each conversion rate shows the percentage of customer who registered in that month who subsequently went in to take the indicated action.
Ex. All the customers who joined in Feb, about 60 percent of them logged into the product at least one time.
Ref: The Lean Startup