Free guide and calculators
Six numbers tell you whether a subscription business is healthy: MRR, ARR, churn, customer lifetime value, acquisition cost and valuation. Here is what each one means, how to calculate it, and a free calculator for each. No sign-up needed.
Each calculator runs in your browser with your own numbers and explains the result.
Monthly recurring revenue from customers, price, churn and expansion.
Open calculatorAnnual recurring revenue from monthly and annual plans, without one-off fees.
Open calculatorCustomer churn and revenue churn for any period, plus the yearly cost.
Open calculatorLifetime value from price, gross margin and churn, with LTV:CAC and payback.
Open calculatorCustomer acquisition cost from marketing and sales spend per new customer.
Open calculatorA valuation range from ARR, growth rate and profitability.
Open calculatorThe formulas below are the ones our calculators use.
| Metric | Formula | What it tells you |
|---|---|---|
| MRR (monthly recurring revenue) | Paying customers × average monthly price | How much predictable revenue comes in each month. |
| ARR (annual recurring revenue) | Monthly plan revenue × 12 + annual plan revenue | The yearly run-rate investors use to compare SaaS companies. |
| Churn rate | Customers lost in a period ÷ customers at the start | How fast you lose customers (or revenue) you already won. |
| LTV (customer lifetime value) | Monthly price × gross margin ÷ monthly churn rate | The gross profit one customer brings in before they leave. |
| CAC (customer acquisition cost) | Sales + marketing spend ÷ new customers | What it costs to win one new customer. |
| Valuation | ARR × revenue multiple (adjusted for growth and profit) | A rough range for what the company could be worth. |
The metrics feed each other. Take an example SaaS with 200 customers paying $49 a month, 3% monthly churn, an 80% gross margin, and $6,000 a month on sales and marketing that brings in 30 new customers:
Change one input and everything downstream moves: cutting churn from 3% to 2% raises customer lifetime by half, so LTV and the LTV:CAC ratio rise with it.
The most cited rule of thumb. Our LTV and CAC calculators mark 3 or more as healthy.
Acquisition spend comes back within a year, so growth doesn't drain cash.
There is no single good churn rate: it depends on price and customer size. Track your own trend month to month.
For an early-stage SaaS company: MRR (or ARR), churn rate, customer lifetime value (LTV), customer acquisition cost (CAC) and the LTV:CAC ratio. Together they show whether revenue is growing, whether customers stay, and whether winning new customers pays off.
MRR is recurring revenue per month; ARR is the same recurring revenue over a year. With only monthly plans, ARR = MRR × 12. With annual plans, add the yearly contract value directly. Neither includes one-off fees such as setup or consulting.
Divide the number of customers lost during a period by the number of customers you had at the start of that period. For example, losing 6 of 200 customers in a month is a 3% monthly churn rate. Revenue churn works the same way using MRR instead of customer counts.
A common rule of thumb is 3:1 or higher: each customer should bring in at least three times what it cost to acquire them. Below 1:1 you lose money on every customer. Our LTV and CAC calculators flag ratios of 3 or more as healthy.
Payback is CAC divided by monthly gross profit per customer. Many SaaS founders and investors aim for 12 months or less, because cash spent on acquisition comes back within a year.
Most often as a multiple of ARR. The multiple goes up with faster growth, low churn and profitability, and down when growth is slow or the company burns cash. A calculator gives a starting range, not a price; real offers depend on the buyer or investor.
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