Recurring Revenue Forecast Calculator

Every fixed acquisition rate has a ceiling.

Every fixed acquisition rate has a ceiling. At a fixed rate of new MRR, a subscription business converges on new-MRR divided by net-churn and stops.

Written and maintained by Mohit PatelLast checked August 4, 2026How we build these

Currency

Starting MRR

New MRR added each month

Monthly revenue churn

Monthly expansion rate

Months to forecast

MRR in 12 months

$90,665

ceiling of $155,000

Net churn4%

New MRR per month$6,200

MRR in 12 months$90,665

Equilibrium MRR$155,000

At a fixed rate of new MRR, the business converges on $155,000 and stops. Growing past a ceiling requires either growing acquisition every month or cutting net churn, and cutting churn raises the ceiling permanently.

How the Recurring Revenue Forecast Calculator works

At a fixed rate of new MRR, a subscription business converges on new-MRR divided by net-churn and stops. Growing past that ceiling requires either growing acquisition every single month or cutting churn, and cutting churn raises the ceiling permanently.

Also known as: MRR forecast calculator · subscription revenue projection · ARR forecast model

How the figure is built

A recurring revenue forecast projects the base forward: next month MRR = current MRR × (1 − churn) + new MRR + expansion − contraction.

Compounding that month by month produces the trajectory, and the assumptions about each component are what determine its accuracy.

Forecasting from a single growth rate rather than from the components is faster and considerably less reliable.

The numbers, worked through

$58,000 of MRR at 4% churn with $6,200 of new and $2,200 of expansion, holding constant: month one gives $58,000 × 0.96 + $8,400 = $64,080.

Month twelve gives roughly $141,000: but only if new business stays at $6,200 while the base more than doubles, which requires no growth in acquisition at all.

Modelling new business as a constant is conservative; modelling it as a constant percentage of the base is aggressive. The truth is usually between.

The base component is the reliable part: $58,000 at 4% churn will be $36,000 in twelve months without any additions, and that number requires no assumptions at all.

Where the figure deceives

Churn applied as a constant understates losses in a growing business, since new subscribers churn hardest and a growing business has proportionally more of them.

The forecast is also most sensitive to the assumption with the least evidence, future new business, and small changes there compound substantially over twelve months.

Acting on it

Build it from the four components with separate assumptions for each, and state the assumption behind new MRR explicitly since it drives the result.

Then run three scenarios rather than one. The spread between a conservative and an optimistic case is the honest representation, and a single line implies a precision that does not exist.

The part of the forecast that is nearly certain

Existing MRR decaying at the observed churn rate is the most reliable component, because it depends only on subscribers who already exist and a rate already measured.

That gives a floor: the revenue the business would have in twelve months if it acquired nobody. Knowing it separates the question of whether the business is stable from the question of whether it is growing.

It is also the figure that makes the cost of churn concrete. A base decaying from $58,000 to $36,000 means $22,000 of monthly revenue has to be replaced just to stand still, which is a different conversation from a growth target.

Seasonality belongs in the model explicitly for consumer subscriptions, where signups and cancellations both cluster around particular months.

A forecast built on a flat monthly rate will miss both the January signup surge and the post-holiday cancellation wave, which frequently offset in the annual total while making every individual month wrong.

Backtesting the model against the last six months, before relying on it, usually exposes which assumption is furthest from reality and is worth the hour it takes.

Sharing the forecast assumptions rather than only the output makes it possible for anyone to challenge the weak one, which is usually new business rather than churn.

Where to go next

The Recurring Revenue Forecast question rarely arrives on its own. These are the ones that usually come with it:

Subscriber Growth Calculator — The standing cost of holding a base.
MRR Growth Rate Calculator — Holding a rate gets harder as the base grows.
Expansion Revenue Calculator — Covering churn makes the base self-sustaining.
Etsy Fee Calculator — Every Etsy fee on one sale, itemised.

Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price, check the platform's current fee schedule before you price a product against it. This is not tax or business advice.

Frequently asked questions

Why does a subscription business have a revenue ceiling?

Because churn scales with the base and acquisition does not. At 6% net churn and £6,200 of new MRR a month, the business converges on about £103,000 MRR.

How do I raise the ceiling?

Reduce net churn or increase expansion. Both act on the denominator, so a small improvement moves the ceiling substantially, halving net churn doubles it.

Does expansion remove the ceiling?

If expansion exceeds churn, yes, the base grows on its own and there is no equilibrium. That is the position every subscription business is trying to reach.

How reliable is this forecast?

It assumes constant churn and constant acquisition, neither of which holds exactly. It is a good structural guide and a poor month-by-month prediction.