Recurring Income Calculator

Accurately forecast your subscription business growth, calculate MRR/ARR, and visualize the impact of churn with our professional recurring income calculator.

Month	Starting Customers	New	Churned	Ending Customers	Monthly Revenue

Note: Calculations assume linear growth and constant churn throughout the period.

What is a Recurring Income Calculator?

A recurring income calculator is a specialized financial tool designed for subscription-based businesses (SaaS), service providers, and membership organizations to forecast future revenue streams. Unlike one-time sales models, recurring income relies on the consistency of customer retention and the steady acquisition of new subscribers.

Who should use a recurring income calculator? Entrepreneurs, financial analysts, and marketing managers use these projections to determine the viability of their business models. By inputting current data such as Monthly Recurring Revenue (MRR) and churn rates, users can visualize how small changes in retention or growth can exponentially impact the bottom line over 12, 24, or 60 months.

Common misconceptions about recurring income include the idea that "growth covers all sins." In reality, a high churn rate can act as a "leaky bucket," where no amount of new customer acquisition can sustain a business if the existing base is leaving faster than they are being replaced. This recurring income calculator helps expose those vulnerabilities before they become critical.

Recurring Income Calculator Formula and Mathematical Explanation

The core logic behind the recurring income calculator involves a iterative monthly calculation where the ending balance of one month becomes the starting balance of the next. The fundamental formula for Monthly Recurring Revenue (MRR) at the end of any given month is:

Ending MRR = (Starting MRR + (New Customers × ARPU)) – (Starting MRR × Churn Rate)

To break this down further, the variables involved in the recurring income calculator are detailed in the table below:

Variable	Meaning	Unit	Typical Range
Starting Customers	Subscribers at the beginning of the month	Count	0 – 1,000,000+
ARPU	Average Revenue Per User	Currency ($)	$5 – $5,000
Churn Rate	Percentage of customers lost monthly	Percentage (%)	1% – 10%
Growth Rate	Number of new customers acquired	Count	Variable

Practical Examples (Real-World Use Cases)

Example 1: The Startup SaaS

Imagine a small software company using a recurring income calculator. They start with 200 customers paying $30/month (MRR: $6,000). They add 20 new customers monthly but have a 5% churn rate. In Month 1, they gain $600 from new users but lose $300 (5% of 6,000) from churn, resulting in a net MRR of $6,300. Over 12 months, the compounding effect determines if they hit their SaaS profitability goals.

Example 2: The Enterprise Consultant

A consultant has 10 high-ticket clients paying $2,000/month. Because the volume is low, a single churn event (10%) is devastating. Using the recurring income calculator, they can see that even with 1 new client every two months, a 10% churn leads to revenue stagnation. This insight pushes them to focus on reducing churn rate through better customer success initiatives.

How to Use This Recurring Income Calculator

1. Enter Current Customers: Input the total number of active, paying subscribers you have right now.
2. Input ARPU: Enter the average monthly fee your customers pay. If you have multiple tiers, calculate a weighted average.
3. Define Growth: Put in the realistic number of new customers you expect to sign up each month.
4. Set Churn Rate: This is the most critical variable. Be honest about your cancellation rates.
5. Select Period: Choose your projection window (usually 12 months for standard budgeting).
6. Analyze Results: Look at the Projected MRR and ARR. Use the chart to see if your growth curve is accelerating or flattening.

Key Factors That Affect Recurring Income Results

• Customer Acquisition Cost (CAC): While the calculator focuses on revenue, your net income depends on how much you spend to get those "New Customers."
• Expansion Revenue: If existing customers upgrade to higher tiers, your ARPU increases, significantly boosting the results of the recurring income calculator.
• Involuntary Churn: Failed credit card payments often account for 20-40% of churn. Managing this can instantly improve MRR growth.
• Seasonality: Many businesses see growth slow down in December or summer. Adjust your "Monthly New Customers" to reflect these cycles.
• Market Saturation: As you grow, finding new customers might become harder and more expensive, impacting the linear growth assumption.
• Lifetime Value (LTV): High recurring income is great, but only if the customer lifetime value exceeds the CAC by at least 3x.

Frequently Asked Questions (FAQ)

Is MRR the same as cash flow?

No. While the recurring income calculator projects revenue, cash flow includes expenses, taxes, and timing of payments. MRR is an accounting metric for performance, not a bank balance indicator.

What is a "good" churn rate for a subscription business?

For B2B SaaS, a monthly churn of 1-3% is excellent. For B2C apps, 5-10% is common. Higher than 10% usually indicates a product-market fit issue.

How does ARR differ from annual revenue?

Annual Recurring Revenue (ARR) is a projection (MRR x 12). Actual annual revenue is the sum of all money collected over a calendar year, including one-time fees.

Can I use this for yearly subscriptions?

Yes. Simply divide the annual price by 12 to get the ARPU for the recurring income calculator to maintain monthly granularity.

Why does the growth curve on the chart look linear?

The calculator assumes a fixed number of new customers monthly. If your growth is percentage-based (e.g., 10% growth per month), the curve would be exponential.

How do I factor in discounts?

Adjust your ARPU downwards to reflect the average price paid after all discounts and promotions are applied.

What is "Net Negative Churn"?

This happens when revenue from existing customers (upgrades) exceeds the revenue lost from cancellations. It is the "holy grail" of recurring revenue strategies.

Should I include taxes in the ARPU?

Usually, financial forecasting is done on "Net Revenue" excluding sales tax/VAT, as taxes are passed through to the government.