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SaaS Churn Rate Calculator

Convert monthly churn to annual, see average customer lifetime and gross retention, and what each point of churn costs in LTV and runway.

Updated · By Niraj Kumar · 3 sources

Revenue and customers

$

ARPU $100 a month.

Retention

%
0%15%

Customers who cancel each month. 2% a month is 22% a year.

%
−2%5%

Upgrades and added seats less downgrades, from customers who stay. Gives NRR of 92%.

Margin and acquisition

%
0%100%

Revenue left after hosting, support, payment fees and third-party APIs.

$

Ads, tools and the pay of sales and marketing staff. CAC $733.

Cash

$
$

R&D, G&A, rent: everything outside cost of revenue and sales and marketing.

LTV settings

%

What future profit is worth today. 0 for an undiscounted LTV.

months

How long a customer's profit counts. 60 is common.

Annual customer churn21.5%2% a month; average customer life 50 months
Customer lifetime value
$3,091
60 months, discounted 10%; simple LTV $3,900
CAC
$733
$22,000 ÷ 30 new customers
LTV:CAC
4.2:1
Healthy, at or above 3:1
CAC payback
9.4 months
Under 12 months: efficient
Implied valuation
$2,457,000
3.4× ARR on 49% growth; Rule of 40: 16
Cash runway
Default alive
Burning $20,200 a month; profitable in month 11, before the cash runs out
What if you pulled one lever?Each row changes one input and leaves the rest as entered. Valuation moves in steps as growth, churn and NRR cross a band.
ChangeLTVLTV:CACPaybackValuationBreak-even
As entered$3,0914.2:19.4 months$2,457,000Month 11
Cut monthly churn by 1 point+$953+1.30–+$1,053,000−2 mo
Add 0.5 points of monthly expansion+$417+0.57––−1 mo
Acquire customers 10% cheaper–+0.47−0.9 mo–−1 mo
Raise gross margin by 5 points+$198+0.27−0.6 mo+$63,000−2 mo
One customer: gross profit less CACCAC not yet earned backProfit after CAC
-$750-$500-$250$0$250$500Payback, month 9.703691215

Expected profit from a new customer, allowing for the chance they churn and for expansion. Simple payback ignores churn: 9.4 months.

Cash in the bank, month by monthShort of cashCash in the bank
$0$250,000$500,000$750,000$1,000,000$1,250,000061218243036

Burning $20,200 a month; profitable in month 11, before the cash runs out. New customers join at today's ARPU; costs stay flat.

Against SMB SaaS benchmarksSmall-business customers, contracts under about $5,000 a year. Checked October 11, 2026.
MetricYoursMedianStrongWhere you sit
Monthly churn2%2%1%Above median
Net revenue retention92%92%102%Above median
Gross margin78%75%82%Above median
CAC payback9.4 months12.0 months8.0 monthsAbove median

How is SaaS churn rate calculated?

Churn rate is customers lost in a period divided by customers at its start. Monthly churn compounds: annual churn is 1 − (1 − monthly)^12, so 2% a month is 21.5% a year, not 24%. Average customer life is 1 ÷ monthly churn: 50 months here.

ARPU = MRR ÷ customers; gross profit per customer g = ARPU × gross margin; annual churn = 1 − (1 − c)^12; NRR = ((1 − c) × (1 + e))^12; GRR = (1 − c)^12; simple LTV = g ÷ c; LTV = Σ g × q^t for t = 0 … H − 1, q = (1 − c)(1 + e) ÷ (1 + d)^(1/12); CAC = sales and marketing ÷ new customers; payback = CAC ÷ g; LTV:CAC = LTV ÷ CAC; cash(t+1) = cash(t) + MRR(t) × margin − sales and marketing − other costs; runway = months until cash < 0

This page uses the same method as the SaaS Unit Economics Calculator, which explains each term and assumption in full.

Worked example

An SMB SaaS on $60,000 MRR from 600 customers at $100 a month, adding 30 a month on $22,000 of sales and marketing, with 2% monthly churn, 1.3% monthly expansion, 78% gross margin, $45,000 of other monthly costs and $600,000 in the bank.

  1. 1Monthly churn: 2%, about 12 of 600 customers cancelling a month
  2. 2Annual churn: 1 − (1 − 0.02)^12 = 21.5%
  3. 3Gross revenue retention: (1 − 0.02)^12 = 78.5%
  4. 4With 1.3% monthly expansion, NRR = 91.6%
  5. 5Average lifetime: 1 ÷ 0.02 = 50 months

21.5% of customers lost a year; each stays about 50 months on average.

Frequently asked questions

How do I convert monthly churn to annual churn?

Use 1 − (1 − monthly churn)^12, not monthly × 12. Churn compounds on a shrinking base: 3% a month is 30.6% a year, not 36%, and 5% a month is 46%, not 60%. Going the other way, monthly churn = 1 − (1 − annual churn)^(1/12), so 20% annual churn is about 1.84% a month.

What is a good monthly churn rate for SaaS?

It depends on who you sell to. Under 1% a month is strong for mid-market and enterprise SaaS on annual contracts; 2 to 3% is typical for SMB tools sold monthly; self-serve and early-stage products often run 3 to 5%. The benchmark table on the SaaS unit economics calculator lists each segment.

What is the difference between logo churn and revenue churn?

Logo churn counts customers lost; revenue churn counts MRR lost, including downgrades. If larger customers churn less, revenue churn is lower than logo churn. Net revenue churn also subtracts expansion and can go negative, which happens whenever NRR is above 100%: the customers you keep grow faster than the ones you lose shrink the base.

Sources

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