SaaS Metrics Calculator

Founders of subscription businesses are asked for the same handful of numbers by investors, partners and their own finance teams. They can all be worked out from one month of simple counts: customers at the start, customers won, customers lost, what each pays, what you spent on sales and marketing, and your gross margin. This page turns those into recurring revenue, churn, retention, lifetime value, acquisition cost and the time to earn that cost back.

Revenue

Monthly recurring revenue, MRR, is the subscription revenue you can expect each month. The page multiplies the customers at the end of the month by the average monthly revenue per customer, then adds any extra revenue from upgrades and subtracts revenue lost to downgrades. Annual recurring revenue is MRR times twelve. Net new MRR is the change from the start of the month to the end.

Churn and retention

Churn is the share of the customers you started the month with who cancelled. Customer lifetime in months is one divided by churn. The page also shows the same monthly churn compounded over a year, and net revenue retention, which counts upgrades and downgrades as well as cancellations, so it can rise above 100% when existing customers expand. If nobody left, churn is zero and the lifetime is shown as unlimited.

Acquisition and value

CAC, customer acquisition cost, is the month’s sales and marketing spend divided by the customers you won. LTV, lifetime value, is what a customer is expected to bring in gross profit over their life: revenue per customer × gross margin ÷ churn. Dividing LTV by CAC gives a ratio, and dividing CAC by monthly gross profit per customer gives the months to earn the cost back.

A worked example

The default is a product that starts with 400 customers, wins 60, loses 24, charges 49 and spends 9,000 on sales and marketing at an 80% margin. The month ends with 436 customers and MRR of 21,364, so ARR is 256,368 and net new MRR 1,764. Churn is 6.00% a month, 52.41% over a year, and net revenue retention is 94.00%. A customer stays 16.7 months on average. CAC is 150, LTV is 653.33, the ratio is 4.4 and the payback is 3.8 months. The second sample is a larger business: 1,200 customers, 150 new, 30 lost, 79 each, 42,000 of spend, an 85% margin, 2,400 of upgrades and 600 of downgrades. It ends with 1,320 customers and MRR of 106,080. Churn is 2.50% (26.20% a year) and retention 99.40%. Lifetime is 40.0 months, CAC 280, LTV 2,686, the ratio 9.6 and the payback 4.2 months.

Reading the ratio

An LTV to CAC ratio around 3 and a payback under a year are often quoted as healthy for subscription businesses, but they are rules of thumb. A business with high margins and cheap growth can run lower, and one with long contracts may accept a longer payback. What matters is whether you are making money on each customer before your cash runs out.

Edge cases

If more customers cancelled than you had, the page rejects the input. With no new customers, CAC is not defined and the ratio and payback show a dash. A zero starting customer count makes churn a dash too. Gross margin must be above 0 and at most 100. Upgrades and downgrades are optional and can both be left empty.

Limits

One month of data is noisy: a single large cancellation can double churn. Average several months before relying on the numbers. LTV assumes that churn and revenue per customer stay constant, which they rarely do, and it counts no discount rate. Annual plans, trials, free tiers, refunds and taxes are not modelled, so enter revenue the way your accounts count it.

Related tools

• CAGR Calculator measures how fast recurring revenue grew between two dates.
• ROAS, CPM, CPC and CTR Calculator looks at the advertising behind the acquisition spend.
• Customer Retention and Repeat Purchase Rate Calculator covers the same questions for shops that sell one-off orders.
• Break-Even Point Calculator shows how many subscribers cover your fixed costs.