Frequently Asked Questions
What is MRR?
MRR (Monthly Recurring Revenue) is the predictable revenue a subscription business earns each month. MRR = number of subscribers × average revenue per user (ARPU).
What is a good churn rate for a SaaS business?
For B2B SaaS, a monthly churn rate under 2% is good. Under 1% is excellent. For B2C subscriptions, 3-7% monthly churn is typical. High churn kills growth — even small improvements compound significantly.
How do I calculate ARR from MRR?
ARR (Annual Recurring Revenue) = MRR × 12. However, this assumes flat growth. This calculator shows your projected ARR accounting for new subscriber growth and monthly churn.
How does churn affect revenue growth?
Churn has a compounding negative effect. At 5% monthly churn, you lose more than half your subscribers in a year. At 1% monthly churn, you retain 89% after 12 months. This calculator shows the exact impact.
How it works
- Enter your current subscriber count and average revenue per user (ARPU).
- Input your expected monthly new subscriber growth percentage.
- Input your monthly churn rate (the percentage of users who cancel).
- Choose a time horizon to see your MRR trajectory.
Tips for best results
- •Growth compounds, but so does churn. Notice how a high churn rate eventually caps your maximum possible MRR.
- •LTV (Lifetime Value) is ARPU divided by your churn rate. Aim for an LTV that is at least 3x your Customer Acquisition Cost (CAC).
- •Net Negative Churn happens when your expansion revenue from existing customers outweighs the revenue lost from cancellations. This is the holy grail of SaaS.