Subscription Revenue Calculator
Calculate MRR, ARR, customer LTV, LTV:CAC ratio, and payback period for subscription and SaaS businesses.
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How to use this calculator
MRR is subscribers × price. Customer lifetime = 1 / monthly churn rate. LTV is the average total revenue from one customer over their lifetime. LTV:CAC ratio compares customer value to acquisition cost — above 3 is healthy.
- 1
Enter the number of active paying subscribers and the monthly subscription price.
- 2
Find your monthly churn rate in your billing system — divide cancellations by total subscribers × 100.
- 3
Enter CAC: total sales and marketing spend divided by new customers acquired in the same period.
- 4
Aim for LTV:CAC above 3× and payback period under 12 months for a healthy, scalable subscription business.
Frequently asked questions
What is a good LTV:CAC ratio?
A ratio of 3:1 is the widely-cited minimum for a healthy SaaS business — you earn $3 for every $1 spent on acquisition. Ratios below 1:1 mean you are losing money on every customer. Ratios above 5:1 may indicate under-investment in growth. Most top-performing SaaS companies operate at 4–7×.
How do I reduce monthly churn?
Identify at-risk customers before they cancel using product usage signals (low logins, incomplete onboarding). Implement proactive customer success outreach. Improve onboarding to drive early value. Consider annual plan discounts — annual subscribers churn at roughly 2–3× lower rates than monthly subscribers.
What is the difference between logo churn and revenue churn?
Logo churn is the percentage of customers who cancel. Revenue churn is the percentage of MRR lost to cancellations and downgrades. If your churning customers are smaller accounts and your expansions come from large accounts, you can have positive revenue churn (growing MRR) even with 5% logo churn.
How do I calculate CAC accurately?
CAC = Total Sales & Marketing Spend / New Customers Acquired. Use the same time period for both. Include salaries of sales and marketing staff, ad spend, software tools, events, and agency fees. Exclude revenue team salaries if they focus on expansion of existing accounts (that is a retention cost, not acquisition).
Subscription Revenue Calculator — MRR, LTV, CAC & Payback Period
The Three Ratios That Define a Healthy Subscription Business
Three ratios tell investors and founders whether a subscription business is fundamentally sound: LTV:CAC (above 3:1), payback period (under 12 months), and net revenue retention (above 100%). A business that scores well on all three can grow almost indefinitely by reinvesting in acquisition. A business that scores poorly on any one is either burning cash unsustainably or capping its growth potential. Use this calculator monthly to track all three and identify which lever needs the most attention.
Why Reducing Churn Is More Valuable Than Adding Subscribers
At 3% monthly churn, average customer lifetime is 33 months and LTV is 33× monthly price. At 5% churn, lifetime drops to 20 months and LTV falls to 20× price — a 40% reduction in value per customer. Yet acquiring a new customer to replace a churned one might cost $180 in CAC. Reducing churn from 5% to 3% effectively adds $13 of LTV per subscriber with zero additional spend. For a 1,000-subscriber business at $29/month, that is $13,000 in added lifetime value across the existing base — without acquiring a single new customer.
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Results are estimates for informational purposes only and do not constitute professional financial, medical, legal, or technical advice. Read full disclaimer →