Subscription Revenue Calculator
Calculate your Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR). Analyze subscription metrics, churn impact, and growth projections.
Calculator
Percentage of customers who cancel each month
Current Metrics
Monthly Recurring Revenue (MRR)
$4900
100 subscribers × $49.00/month
Annual Recurring Revenue (ARR)
$58800
MRR × 12 months
Customer Lifetime Value
$980
Avg. 20.0 months
Monthly Churn Loss
5 subs
$245 MRR
Net Monthly Growth
+15 subs
New - Churned
12-Month Projection
Projected Subscribers (Month 12)
238
+138 (+138.0% growth)
Projected MRR (Month 12)
$11662
+$6762 (+138.0% growth)
Total Revenue (12 months)
| Month | Subscribers | MRR | Total Revenue |
|---|---|---|---|
| 0 | 100 | $4900 | $4900 |
| 1 | 115 | $5635 | $5635 |
| 2 | 129 | $6321 | $6321 |
| 3 | 143 | $7007 | $7007 |
| 4 | 156 | $7644 | $7644 |
| 5 | 168 | $8232 | $8232 |
| 6 | 180 | $8820 | $8820 |
| 7 | 191 | $9359 | $9359 |
| 8 | 201 | $9849 | $9849 |
| 9 | 211 | $10339 | $10339 |
| 10 | 220 | $10780 | $10780 |
| 11 | 229 | $11221 | $11221 |
| 12 | 238 | $11662 | $11662 |
Tip: Focus on reducing churn rate - even a 1% improvement dramatically increases LTV and long-term revenue. Most subscription businesses should prioritize retention over acquisition until churn is under 5% monthly.
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Understanding Recurring Revenue Metrics
Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR) are the foundational metrics for any subscription-based business. They provide predictable revenue forecasting and are essential for measuring business health, planning growth, and attracting investment.
MRR Components
- New MRR: Revenue from new customers acquired this month
- Expansion MRR: Additional revenue from existing customers (upgrades, add-ons)
- Churned MRR: Revenue lost from customers who cancelled
- Contraction MRR: Revenue lost from downgrades
- Net New MRR: New + Expansion - Churned - Contraction
The Power of Reducing Churn
A small reduction in churn rate has dramatic compounding effects. For a business with $100K MRR:
- At 5% monthly churn: ~$540K ARR after retention losses
- At 3% monthly churn: ~$700K ARR after retention losses
- That 2% improvement = $160K additional annual revenue
ARR for Annual Planning
While MRR is useful for month-to-month operations, ARR (MRR × 12) is the standard metric for annual planning, valuation discussions, and comparing companies. Most SaaS companies are valued as a multiple of ARR, typically ranging from 5-15x for growth-stage companies.
Pro Tip: Net Revenue Retention
The best subscription businesses achieve Net Revenue Retention (NRR) over 100%, meaning expansion revenue from existing customers exceeds churned revenue. This allows growth even without acquiring new customers.
Frequently Asked Questions
What is the difference between MRR and ARR?
MRR (Monthly Recurring Revenue) is your predictable monthly income from subscriptions, while ARR (Annual Recurring Revenue) is MRR × 12. MRR is typically used for month-to-month analysis and short-term planning, while ARR is better for annual planning, investor reporting, and comparing companies of different sizes.
How do I calculate MRR from different billing cycles?
Convert all subscriptions to their monthly equivalent: annual plans divided by 12, quarterly plans divided by 3, and weekly plans multiplied by 4.33. Then sum all the monthly values. Our calculator automatically handles these conversions for accurate MRR calculations.
What's a good monthly churn rate for SaaS?
For B2B SaaS, a good monthly churn rate is typically 3-5% for SMB customers and under 1% for enterprise. For B2C subscriptions, 5-7% monthly churn is common. Lower churn directly impacts your growth rate—reducing churn from 5% to 3% can dramatically increase your compounding revenue over time.
How does churn affect my annual revenue?
Churn has a compounding effect on revenue. With 5% monthly churn, you lose about 46% of customers annually. With 10% monthly churn, you lose about 72% annually. This means you need significant new customer acquisition just to maintain current revenue levels, making churn reduction one of the highest-ROI activities.
What metrics should I track alongside MRR?
Key complementary metrics include: Net Revenue Retention (NRR) which accounts for expansions and contractions, Customer Lifetime Value (LTV), Customer Acquisition Cost (CAC), LTV:CAC ratio (should be >3:1), and Average Revenue Per User (ARPU). Together these give a complete picture of subscription health.
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