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 formulas does the subscription revenue calculator use?
This tool uses MRR = subscribers × monthly price, ARR = MRR × 12, customer lifetime = 1 ÷ (churn % ÷ 100) months, LTV = monthly price × lifetime, LTV:CAC = LTV ÷ CAC, and payback = CAC ÷ monthly price. The defaults give $24,650.00 MRR, a 33.3-month lifetime, $966.67 LTV and a 5.4× ratio.
How is churn modelled?
As one constant monthly percentage applied to every customer. Lifetime is the reciprocal of that rate, so 3% churn means 33.3 months and 5% means 20.0 months. The tool does not track cohorts, changing churn over a customer’s life, or reactivations, and it does not project the subscriber count forward: MRR is simply today’s subscribers times the price.
What happens at 0% churn?
Lifetime, LTV and the LTV:CAC ratio show “n/a (no churn entered)” because a zero rate implies an infinite lifetime. MRR, ARR and payback still compute. Earlier, zero was silently replaced by 0.01%, which produced a lifetime of 10,000 months and an enormous LTV. Churn is also capped at 100%.
Why is the LTV:CAC ratio “n/a” when CAC is zero?
Dividing by zero is undefined, so the tool says so instead of showing 0.0× and a “Poor” rating, which it did before. The payback period is 0.0 months in that case. Enter your actual acquisition spend per new customer to get a ratio.
Does LTV include gross margin?
No. LTV here is revenue, price × lifetime, so it overstates the profit a customer generates by whatever it costs to serve them. Likewise the payback period is CAC ÷ monthly price in revenue terms, not margin terms. Multiply the price by your gross margin first if you want profit-based values.
What do the rating labels mean?
They are cut-offs written into the tool: 5× or more is labelled Excellent, 3× to under 5× Healthy, 1× to under 3× Marginal, and below 1× Poor. They are labels for quick scanning rather than universal standards, so decide your own acceptable ratio for your market and cash position.
How are subscribers, price and CAC treated if I enter odd values?
Subscribers, price and CAC are limited to zero or above, and a cleared box, which the page turns into 0, is read as 0. The tool assumes one flat price for all subscribers, so tiered plans, discounts and annual billing need to be averaged into a single monthly figure before you enter them.
Subscription revenue calculator — recurring revenue, customer lifetime, LTV and CAC payback
From a price and a churn rate to lifetime value
Four inputs drive everything: how many people pay, what each pays monthly, what fraction leaves each month and what it cost to win a customer. Subscribers times price gives MRR and ARR. The churn rate sets how long an average customer stays, which converts the price into lifetime revenue, and that is set against acquisition cost to give a ratio and a payback period.
| Output | Formula | Edge case |
|---|---|---|
| MRR / ARR | Subscribers × price; × 12 | Always shown |
| Customer lifetime | 1 ÷ (churn % ÷ 100) | n/a at 0% churn |
| LTV | Price × lifetime | n/a at 0% churn |
| LTV:CAC | LTV ÷ CAC | n/a if CAC or churn is 0 |
| Payback | CAC ÷ price | 0.0 months if CAC is 0 |
Two subscription businesses
The first row is the default setup: a low-priced product with modest churn and acquisition cost. The second is a higher-priced product with faster churn and a larger acquisition cost. Results are calculator output.
| Subscribers · price · churn · CAC | MRR | ARR | Lifetime | LTV | LTV:CAC | Payback |
|---|---|---|---|---|---|---|
| 850 · $29 · 3% · $180 | $24,650.00 | $295,800.00 | 33.3 months | $966.67 | 5.4× Excellent | 6.2 months |
| 200 · $99 · 5% · $600 | $19,800.00 | $237,600.00 | 20.0 months | $1,980.00 | 3.3× Healthy | 6.1 months |
Reading the two rows
The second business has less recurring revenue but a higher LTV, since each customer pays more even though they leave faster. Its LTV:CAC is lower, 3.3× against 5.4×, because it spends more to win each customer. The payback periods are nearly identical, around six months, so both recover acquisition cost quickly relative to their lifetime. Which looks better depends on how much cash you can tie up while waiting.
Why the churn input matters most
Lifetime is the reciprocal of churn, so small changes at low rates have a large effect. Moving from 3% to 5% in the examples shortens lifetime from 33.3 months to 20.0. Measure churn the same way every month, such as customers lost divided by customers at the start, and use a representative period instead of one unusually good or bad month.
Where the model is rough
It treats churn as constant, charges one price to everyone, and counts revenue rather than profit. It has no discounting of future income, no expansion revenue, and no seasonality. Use it to compare scenarios and to see which assumption matters most, then rebuild the numbers with margin and cohort data from your billing system if you plan to act on them. Changing one input at a time makes the effect of each easy to read.
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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 →