Subscription Revenue Calculator Formula

Understand the math behind the subscription revenue calculator. Each variable explained with a worked example.

Use the Subscription Revenue Calculator

Formulas Used

Gross Annual Revenue (no churn)

gross_arr = subscribers * monthly_price * 12

Net Annual Revenue (after churn)

net_arr = subscribers * monthly_price * 12 * (1 - churn_rate / 100)

Monthly Recurring Revenue

mrr = subscribers * monthly_price

Revenue Lost to Churn

revenue_lost_to_churn = subscribers * monthly_price * 12 * churn_rate / 100

Variables

VariableDescriptionDefault
subscribersNumber of Subscribers1000
monthly_priceMonthly Price(USD)29
churn_rateAnnual Churn Rate(%)10

How It Works

How to Calculate Subscription Revenue

Formula

Net Annual Revenue = Subscribers x Monthly Price x 12 x (1 - Churn Rate/100)

Churn rate is the percentage of subscribers who cancel within a year. Reducing churn is one of the most powerful levers for growing subscription revenue.

Worked Example

1,000 subscribers at $29/month with a 10% annual churn rate.

subscribers = 1000monthly_price = 29churn_rate = 10
  1. 01MRR = 1,000 x $29 = $29,000
  2. 02Gross ARR = $29,000 x 12 = $348,000
  3. 03Revenue lost to churn = $348,000 x 10% = $34,800
  4. 04Net ARR = $348,000 - $34,800 = $313,200

Ready to run the numbers?

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