Revenue Calculator

MRR (Monthly Recurring Revenue) is predictable monthly income from subscriptions. ARR (Annual Recurring Revenue) is MRR × 12. MRR is better for tracking short-term growth and churn, while ARR is used for annual planning and is preferred by investors for companies over $10M revenue. Most SaaS companies report both metrics.

LTV = ARPU ÷ Churn Rate. For example, if average revenue per user is $50/month and monthly churn is 5%, LTV = $50 ÷ 0.05 = $1,000. More detailed formulas include: LTV = ARPU × Gross Margin × Average Customer Lifespan. LTV should be at least 3× your Customer Acquisition Cost (CAC) for a healthy business.

Benchmark churn rates vary by business type: B2B SaaS targets 2-5% monthly (best-in-class under 2%), B2C subscriptions see 5-10% monthly, and consumer apps can reach 15-20%. Annual contracts reduce churn to 5-15% yearly. Calculate churn as: Churned Customers ÷ Starting Customers × 100. Negative churn (expansion revenue exceeding lost revenue) is the gold standard.

Start with historical data: current MRR, growth rate, and churn. Use compound growth formula: Future Revenue = Current × (1 + Monthly Rate)^Months. Factor in seasonality, market conditions, and capacity constraints. Conservative projections use 80% of optimistic estimates. For fundraising, show 3 scenarios: base case, optimistic, and pessimistic with assumptions clearly stated.

Key SaaS metrics include: MRR/ARR growth rate (>20% YoY is strong), LTV:CAC ratio (>3:1), Net Revenue Retention (>100% means expansion), CAC Payback Period (<12 months), and Gross Margin (>70%). The Rule of 40 states that growth rate + profit margin should exceed 40%. Track these metrics monthly and benchmark against industry standards.