How this calculator works
This dashboard starts from monthly recurring revenue and the number of customers. Dividing one by the other gives average revenue per account, and multiplying MRR by twelve gives annual recurring revenue. Gross profit applies the gross margin to MRR. Customer lifetime value uses the monthly gross margin per customer, including expansion, divided by monthly churn, while the lifetime in months is one divided by churn. Customer acquisition cost is compared with lifetime value to show how much value each acquisition dollar creates, and CAC payback counts the months of gross margin needed to recover the acquisition cost. Net revenue retention shows what happens to the revenue base from existing customers after churn and expansion.
Formula
ARPA = MRR / customers. ARR = MRR x 12. Gross profit = MRR x gross margin. Monthly margin per customer = (ARPA + expansion) x gross margin. LTV = monthly margin / churn. Lifetime months = 1 / churn. LTV to CAC = LTV / CAC. CAC payback months = CAC / monthly margin. Net revenue retention = 1 - churn + expansion / ARPA.
Worked example
With 400 customers and $200,000 of MRR, ARPA is $500 and ARR is $2,400,000. At an 80% gross margin the monthly gross profit is $160,000 and each customer produces $400 of margin. At 2% monthly churn the lifetime is 50 months and LTV is $20,000, so with a $1,000 acquisition cost LTV to CAC is 20 and payback is 2.5 months. Net revenue retention is 98%.
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Frequently asked questions
Is LTV to CAC of 3 still the target?
Three to one is a common rule of thumb, not a law. A fast payback can justify a lower ratio because the cash comes back quickly, while a long contract with low churn can carry a higher one. What matters is the link between the ratio, payback and how much cash you can invest in growth.
What does net revenue retention below 100% mean?
The existing customer base shrinks even with expansion. Revenue can still grow through new customers, but every new sale is partly replacing lost revenue. Above 100% means expansion outruns churn within the base.
Should churn be revenue churn or logo churn?
This model uses a monthly rate against the whole customer base, which is closest to logo churn. For revenue retention, use revenue churn and revenue expansion, because a small customer leaving and a large customer upgrading have very different revenue effects.