How does the Churn Impact Calculator translate a churn increase (e.g., 2% → 3%) into an ARR shortfall?

It projects monthly MRR under your “plan churn” vs “scenario churn,” then annualizes the ending MRR (ARR run rate = ending MRR × 12) to show the ending ARR gap.

Does “Net new MRR per month (before churn)” include upgrades/expansion, or only new customers?

Treat it as your total net new MRR you expect to add each month before churn is applied to the existing base (new + expansion − contraction, if that’s how you track it).

Is churn applied once to the starting MRR, or does it compound monthly on the shrinking/growing base?

It compounds monthly: each month churn reduces the current MRR base, then your net new MRR is added for that month.

What does “Additional net new MRR/month to still hit plan ending MRR” actually mean?

It’s the extra monthly net new MRR you’d need (on top of your current net new MRR input) to overcome the higher churn and still land on the plan’s ending MRR by the end of the horizon.

Churn Impact Calculator: MRR & ARR Revenue Loss vs Plan

Churn Impact Calculator (Plan vs Scenario)

Convert churn from a KPI into consequences: revenue impact, growth drag, and plan risk. If monthly churn changes from X% to Y%, what happens to ending MRR/ARR, net new MRR, and the gap vs plan?

Inputs

Starting MRR

Net new MRR per month (before churn)

Horizon (months)

Scenario setup

Plan churn (monthly)

Scenario churn (monthly)

Results

ARR gap vs plan (scenario − plan) $
Subscription revenue lost vs plan (over horizon) $
Additional net new MRR/month to still hit plan ending MRR $
Ending MRR (plan) $
Ending MRR (scenario) $
MRR gap vs plan (scenario − plan) $
Ending ARR (plan, run rate) $
Ending ARR (scenario, run rate) $
Net MRR change over horizon (plan, ending − starting) $
Net MRR change over horizon (scenario, ending − starting) $

What is Churn Impact?

Churn impact is the forecasted difference between a plan churn rate and a scenario churn rate on recurring revenue over time.

It matters because churn is a growth tax: it reduces the compounding base of MRR, lowers the ending ARR run-rate, and forces higher net new MRR to hit the same plan.

In board/CFO terms, it shows the retention-driven drag on durable cash flows, efficiency metrics like SaaS Quick Ratio and Burn Multiple, and expansion health via Net Revenue Retention (NRR).

Formula

Example

Assume: Starting MRR $250,000, Net new MRR/month (before churn) $20,000, Horizon 12 months, Plan churn 2% monthly, Scenario churn 3% monthly.

Month-by-month logic (conceptually): each month you add $20,000, then churn reduces the base more under 3% than 2%, so the gap widens over time.

Ending results (12 months):

Ending MRR (plan): $411,462
Ending MRR (scenario): $377,566
MRR gap vs plan: -$33,897
Ending ARR run rate (plan): $4,937,549
Ending ARR run rate (scenario): $4,530,788
ARR gap vs plan: -$406,761
Subscription revenue lost vs plan (over horizon): $196,015
Additional net new MRR/month to still hit plan ending MRR: $3,322

How to Use the Churn Impact Calculator

Enter your starting MRR, expected net new MRR per month, and a time horizon, then compare your planned churn vs a worse (or better) churn scenario to see the MRR/ARR gap and revenue impact.

Set your baseline MRR - In Starting MRR, enter your current recurring revenue at the beginning of the period.
Enter your growth input - In Net new MRR per month (before churn), enter how much MRR you expect to add monthly before churn reduces the existing base.
Define the timeline and churn assumptions - Set Horizon (months), then enter Plan churn (monthly) and Scenario churn (monthly).
Read the “gap” outputs - Use MRR gap vs plan and ARR gap vs plan to quantify the shortfall (or upside). The ARR values are shown as run rate based on ending MRR.
formula: Ending ARR (run rate) = Ending MRR × 12
Use the action metric - Check Additional net new MRR/month to still hit plan ending MRR to turn the churn problem into a concrete monthly growth target (sales + expansion + pricing actions).

Frequently Asked Questions

It projects monthly MRR under your “plan churn” vs “scenario churn,” then annualizes the ending MRR (ARR run rate = ending MRR × 12) to show the ending ARR gap.
Treat it as your total net new MRR you expect to add each month before churn is applied to the existing base (new + expansion − contraction, if that’s how you track it).
It compounds monthly: each month churn reduces the current MRR base, then your net new MRR is added for that month.
It’s the extra monthly net new MRR you’d need (on top of your current net new MRR input) to overcome the higher churn and still land on the plan’s ending MRR by the end of the horizon.

Methodology & Sources

Bibliography

Manas Punhani; Will Bressman; G. J. King; A. J. Wasserstein (2021). On the Nature of Customer Attrition and Revenue Analysis — Yale School of Management (Yale SOM Case) https://som.yale.edu/sites/default/files/2025-04/On%20the%20Nature%20of%20Customer%20Attrition%20and%20Revenue%20Analysis.pdf
Accessed 2025-12-19
Peter S. Fader; Bruce G. S. Hardie (2007). How to Project Customer Retention — Journal of Interactive Marketing (Wiley Periodicals, Inc.) https://faculty.wharton.upenn.edu/wp-content/uploads/2012/04/Fader_hardie_jim_07.pdf
Accessed 2025-12-19
Paola Lagunes (2023). How to calculate Monthly Recurring Revenue (MRR) — Recurly https://recurly.com/blog/how-to-calculate-mrr/
Accessed 2025-12-19

Churn Impact Calculator (Plan vs Scenario)

Inputs

Scenario setup

Results

What It Means?

What is Churn Impact?

Formula

Example

How to Use the Churn Impact Calculator

Set your baseline MRR - In Starting MRR, enter your current recurring revenue at the beginning of the period.

Enter your growth input - In Net new MRR per month (before churn), enter how much MRR you expect to add monthly before churn reduces the existing base.

Define the timeline and churn assumptions - Set Horizon (months), then enter Plan churn (monthly) and Scenario churn (monthly).

Read the “gap” outputs - Use MRR gap vs plan and ARR gap vs plan to quantify the shortfall (or upside). The ARR values are shown as run rate based on ending MRR.

Use the action metric - Check Additional net new MRR/month to still hit plan ending MRR to turn the churn problem into a concrete monthly growth target (sales + expansion + pricing actions).

Frequently Asked Questions

Methodology & Sources

Bibliography

Other Calculators in SaaS Metrics

Customer Churn Rate (Logo Churn) Calculator

Revenue Churn Rate (Gross MRR Churn) Calculator

Gross Revenue Retention Calculator

Net Revenue Retention (NRR) Calculator

Churned MRR (Cancellation MRR) Calculator

Contraction MRR (Downgrade MRR) Calculator