Subscription economics summary
Review payback, cash recovery, margin, LTV, retention, and warnings.
Month-by-month payback schedule
Track active customers, revenue, costs, contribution, cash, and remaining CAC.
| Month | Starting | Churned | Ending | Revenue | Service cost | Contribution | Discounted contribution | Cash | Cumulative | Remaining CAC | Status |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | 1.00 | 0.03 | 0.97 | $109.00 | $32.77 | $76.23 | $76.23 | $75.47 | $76.23 | $523.77 | Recovering |
| 2 | 0.97 | 0.03 | 0.94 | $107.00 | $31.84 | $75.16 | $74.57 | $74.41 | $151.39 | $448.61 | Recovering |
| 3 | 0.94 | 0.03 | 0.91 | $105.03 | $30.93 | $74.10 | $72.93 | $73.36 | $225.49 | $374.51 | Recovering |
| 4 | 0.91 | 0.03 | 0.89 | $103.11 | $30.06 | $73.05 | $71.33 | $72.32 | $298.54 | $301.46 | Recovering |
| 5 | 0.89 | 0.03 | 0.86 | $101.21 | $29.20 | $72.01 | $69.76 | $71.29 | $370.55 | $229.45 | Recovering |
| 6 | 0.86 | 0.03 | 0.83 | $99.35 | $28.38 | $70.98 | $68.22 | $70.27 | $441.53 | $158.47 | Recovering |
| 7 | 0.83 | 0.02 | 0.81 | $97.53 | $27.57 | $69.96 | $66.70 | $69.26 | $511.49 | $88.51 | Recovering |
| 8 | 0.81 | 0.02 | 0.78 | $95.74 | $26.79 | $68.95 | $65.22 | $68.26 | $580.44 | $19.56 | Recovering |
| 9 | 0.78 | 0.02 | 0.76 | $93.98 | $26.03 | $67.95 | $63.77 | $67.27 | $648.39 | $0.00 | Paid back |
| 10 | 0.76 | 0.02 | 0.74 | $92.26 | $25.30 | $66.96 | $62.34 | $66.29 | $715.35 | $0.00 | Paid back |
| 11 | 0.74 | 0.02 | 0.72 | $90.56 | $24.58 | $65.98 | $60.94 | $65.32 | $781.33 | $0.00 | Paid back |
| 12 | 0.72 | 0.02 | 0.69 | $88.90 | $23.89 | $65.01 | $59.57 | $64.36 | $846.34 | $0.00 | Paid back |
| 13 | 0.69 | 0.02 | 0.67 | $87.27 | $23.21 | $64.05 | $58.23 | $63.41 | $910.39 | $0.00 | Paid back |
| 14 | 0.67 | 0.02 | 0.65 | $85.67 | $22.56 | $63.11 | $56.92 | $62.48 | $973.50 | $0.00 | Paid back |
| 15 | 0.65 | 0.02 | 0.63 | $84.09 | $21.92 | $62.17 | $55.63 | $61.55 | $1,035.67 | $0.00 | Paid back |
| 16 | 0.63 | 0.02 | 0.61 | $82.55 | $21.31 | $61.24 | $54.36 | $60.63 | $1,096.91 | $0.00 | Paid back |
| 17 | 0.61 | 0.02 | 0.60 | $81.03 | $20.71 | $60.33 | $53.13 | $59.72 | $1,157.24 | $0.00 | Paid back |
| 18 | 0.60 | 0.02 | 0.58 | $79.55 | $20.12 | $59.42 | $51.92 | $58.83 | $1,216.66 | $0.00 | Paid back |
| 19 | 0.58 | 0.02 | 0.56 | $78.08 | $19.56 | $58.53 | $50.73 | $57.94 | $1,275.19 | $0.00 | Paid back |
| 20 | 0.56 | 0.02 | 0.54 | $76.65 | $19.01 | $57.64 | $49.57 | $57.07 | $1,332.83 | $0.00 | Paid back |
| 21 | 0.54 | 0.02 | 0.53 | $75.24 | $18.47 | $56.77 | $48.43 | $56.20 | $1,389.60 | $0.00 | Paid back |
| 22 | 0.53 | 0.02 | 0.51 | $73.86 | $17.96 | $55.91 | $47.32 | $55.35 | $1,445.51 | $0.00 | Paid back |
| 23 | 0.51 | 0.02 | 0.50 | $72.51 | $17.45 | $55.05 | $46.23 | $54.50 | $1,500.56 | $0.00 | Paid back |
| 24 | 0.50 | 0.01 | 0.48 | $71.18 | $16.96 | $54.21 | $45.16 | $53.67 | $1,554.77 | $0.00 | Paid back |
| 25 | 0.48 | 0.01 | 0.47 | $69.87 | $16.49 | $53.38 | $44.12 | $52.85 | $1,608.15 | $0.00 | Paid back |
| 26 | 0.47 | 0.01 | 0.45 | $68.59 | $16.03 | $52.56 | $43.09 | $52.03 | $1,660.71 | $0.00 | Paid back |
| 27 | 0.45 | 0.01 | 0.44 | $67.33 | $15.58 | $51.75 | $42.09 | $51.23 | $1,712.46 | $0.00 | Paid back |
| 28 | 0.44 | 0.01 | 0.43 | $66.09 | $15.14 | $50.95 | $41.11 | $50.44 | $1,763.40 | $0.00 | Paid back |
| 29 | 0.43 | 0.01 | 0.41 | $64.88 | $14.72 | $50.16 | $40.15 | $49.65 | $1,813.56 | $0.00 | Paid back |
| 30 | 0.41 | 0.01 | 0.40 | $63.69 | $14.31 | $49.38 | $39.22 | $48.88 | $1,862.93 | $0.00 | Paid back |
| 31 | 0.40 | 0.01 | 0.39 | $62.52 | $13.91 | $48.60 | $38.30 | $48.12 | $1,911.54 | $0.00 | Paid back |
| 32 | 0.39 | 0.01 | 0.38 | $61.37 | $13.52 | $47.84 | $37.40 | $47.37 | $1,959.38 | $0.00 | Paid back |
| 33 | 0.38 | 0.01 | 0.37 | $60.24 | $13.15 | $47.09 | $36.52 | $46.62 | $2,006.48 | $0.00 | Paid back |
| 34 | 0.37 | 0.01 | 0.36 | $59.14 | $12.78 | $46.35 | $35.67 | $45.89 | $2,052.83 | $0.00 | Paid back |
| 35 | 0.36 | 0.01 | 0.34 | $58.05 | $12.43 | $45.62 | $34.83 | $45.17 | $2,098.45 | $0.00 | Paid back |
| 36 | 0.34 | 0.01 | 0.33 | $56.98 | $12.08 | $44.90 | $34.00 | $44.45 | $2,143.36 | $0.00 | Paid back |
| 37 | 0.33 | 0.01 | 0.32 | $55.94 | $11.75 | $44.19 | $33.20 | $43.75 | $2,187.55 | $0.00 | Paid back |
| 38 | 0.32 | 0.01 | 0.31 | $54.91 | $11.42 | $43.49 | $32.42 | $43.06 | $2,231.04 | $0.00 | Paid back |
| 39 | 0.31 | 0.01 | 0.30 | $53.90 | $11.10 | $42.80 | $31.65 | $42.37 | $2,273.84 | $0.00 | Paid back |
| 40 | 0.30 | 0.01 | 0.30 | $52.91 | $10.80 | $42.12 | $30.90 | $41.70 | $2,315.95 | $0.00 | Paid back |
| 41 | 0.30 | 0.01 | 0.29 | $51.94 | $10.50 | $41.44 | $30.16 | $41.03 | $2,357.40 | $0.00 | Paid back |
| 42 | 0.29 | 0.01 | 0.28 | $50.99 | $10.21 | $40.78 | $29.45 | $40.37 | $2,398.18 | $0.00 | Paid back |
| 43 | 0.28 | 0.01 | 0.27 | $50.05 | $9.93 | $40.13 | $28.74 | $39.72 | $2,438.30 | $0.00 | Paid back |
| 44 | 0.27 | 0.01 | 0.26 | $49.13 | $9.65 | $39.48 | $28.06 | $39.09 | $2,477.78 | $0.00 | Paid back |
| 45 | 0.26 | 0.01 | 0.25 | $48.23 | $9.39 | $38.84 | $27.39 | $38.46 | $2,516.63 | $0.00 | Paid back |
| 46 | 0.25 | 0.01 | 0.25 | $47.35 | $9.13 | $38.22 | $26.73 | $37.84 | $2,554.85 | $0.00 | Paid back |
| 47 | 0.25 | 0.01 | 0.24 | $46.48 | $8.88 | $37.60 | $26.09 | $37.22 | $2,592.45 | $0.00 | Paid back |
| 48 | 0.24 | 0.01 | 0.23 | $45.62 | $8.63 | $36.99 | $25.47 | $36.62 | $2,629.44 | $0.00 | Paid back |
Payback and subscription performance charts
Sensitivity analysis
Measure payback changes across five assumption variations.
| Variation | Input value | Payback months | LTV:CAC | Outcome |
|---|---|---|---|---|
| Run sensitivity analysis to populate this table. | ||||
Required values for the target payback period
Scenario comparison
| Scenario | Price | CAC | Churn | Margin | Payback | LTV:CAC | Classification |
|---|---|---|---|---|---|---|---|
| Add scenarios and run the comparison. | |||||||
Cohort payback summary
| Cohort | Customers | CAC | Starting MRR | Churn | Expansion | Payback | 36-month contribution |
|---|---|---|---|---|---|---|---|
| Add or import cohorts, then analyze them. | |||||||
Worked subscription payback example
| Input | Example value | Explanation |
|---|---|---|
| Customer acquisition cost | $600 | Total acquisition investment per customer. |
| Monthly subscription revenue | $100 | Recurring revenue collected each month. |
| Monthly service cost | $25 | Hosting, support, processing, and delivery costs. |
| Monthly contribution profit | $75 | Revenue remaining after service costs. |
| Simple payback | 8 months | $600 divided by $75 monthly contribution. |
Core formulas
Subscription calculator field guide
Customer acquisition cost
The complete investment required to acquire one paying subscriber. Include marketing, sales, trials, onboarding, commissions, promotions, and implementation.
Direct CAC
A known per-customer acquisition cost entered without rebuilding the sales and marketing cost stack.
Calculated CAC
Total acquisition spending divided by the number of newly acquired paying customers.
Blended CAC
An average combining known direct CAC and calculated acquisition spending.
Monthly recurring revenue
Predictable base subscription revenue normalized to a monthly period.
Annual recurring revenue
Monthly recurring revenue multiplied by twelve, excluding one-time setup fees.
Average revenue per user
Average recurring revenue attributable to each active subscriber.
Contribution profit
Revenue remaining after direct service delivery, transaction, refund, chargeback, and tax costs.
Gross margin
Contribution profit divided by recognized revenue.
Accounting payback
The time required for recognized contribution profit to recover acquisition investment.
Cash payback
The time required for actual collected cash contribution to recover acquisition investment.
Break-even date
The estimated calendar date when cumulative contribution reaches acquisition investment.
Customer churn
The percentage of active customers cancelling during a period.
Revenue churn
The percentage of recurring revenue lost through cancellations, downgrades, or usage decline.
Gross revenue retention
Recurring revenue retained before expansion revenue.
Net revenue retention
Recurring revenue retained after expansion, contraction, and churn.
Customer lifetime
A churn-based estimate of how long an average customer remains active.
Simple lifetime value
Monthly contribution multiplied by estimated customer lifetime.
Discounted cash-flow LTV
Projected contribution discounted to reflect the time value of money.
LTV-to-CAC ratio
Estimated lifetime value divided by customer acquisition cost.
Expansion revenue
Additional recurring revenue from upgrades, more seats, add-ons, or increased usage.
Contraction revenue
Revenue lost through downgrades, reduced seats, or lower usage.
Free trial
A period that delays paid subscription revenue while acquisition and service costs may continue.
Trial conversion
The percentage of trial users becoming paying customers.
Introductory discount
Temporary price reduction applied during early subscription periods.
Annual prepayment
Upfront annual cash collection that can accelerate cash payback.
Failed payments
Scheduled payments that are not successfully collected.
Collection delay
Time between revenue recognition and cash receipt.
Refund allowance
Expected revenue returned to customers.
Chargeback allowance
Expected revenue reversed through payment disputes.
Payment processing
Percentage and fixed transaction costs charged by payment providers.
Cohort analysis
Evaluation of customer groups acquired during the same period.
Scenario comparison
Side-by-side testing of alternative pricing, CAC, churn, and margin assumptions.
Sensitivity analysis
Measurement of how output changes when a key input moves.
Goal seeking
Solving for the CAC, price, contribution, or churn needed to meet a target.
Payback probability
Estimated probability that a customer remains active until CAC recovery.
Projection horizon
Maximum number of months included in the schedule.
Discount rate
Rate used to reduce future contribution into present-value terms.
Business preset
Starter assumptions tailored to common subscription business models.
Cash collected in advance
Payments received before or at the beginning of service delivery.
Cash collected in arrears
Payments received after service delivery or invoicing.
Setup-fee recognition
Distribution of one-time implementation revenue across accounting periods.
Usage-based revenue
Revenue that varies with consumption, activity, storage, or transactions.
Add-on revenue
Recurring revenue from optional features, services, or modules.
Account management cost
Recurring cost of customer success and account management.
Infrastructure cost
Cloud hosting, bandwidth, storage, compute, and related service expenses.
Support cost
Recurring customer support labor and software cost.
Licensing cost
Third-party software or content fees required to serve customers.
Other direct COGS
Direct goods, inventory, content, fulfillment, or delivery cost.
Price escalation
Scheduled annual subscription price increase.
Survival curve
Projected percentage of the original cohort remaining active over time.
Revenue recognition
Accounting timing for when subscription and setup revenue is recorded.
Cash recovery
Cumulative collected cash contribution after failed payments and delays.
Unrecovered CAC
Acquisition investment still outstanding at the end of the projection.
Target payback
Desired maximum recovery period used by goal-seeking calculations.
Target LTV-to-CAC
Desired efficiency ratio used by warnings and scenario classification.
Channel CAC
Acquisition spending divided by customers acquired through one channel.
Paid CAC
Acquisition cost calculated only from paid marketing and paid sales activity.
Organic CAC
Allocated acquisition expense for content, referrals, communities, and organic growth.
Portfolio payback
Recovery of acquisition spending across a group of customers rather than one customer.
Understanding subscription payback
Subscription payback measures acquisition recovery speed. It compares customer acquisition cost with recurring contribution profit. Faster recovery usually improves capital efficiency and growth flexibility.
Revenue alone cannot measure reliable payback. Hosting, support, processing, refunds, and service costs matter. Contribution profit provides a more realistic recovery measure.
Why churn changes payback
Some customers cancel before acquisition spending is recovered. Churn-adjusted schedules reduce active customers during each projected month. This shows whether expected customer survival supports recovery.
Revenue churn may differ from customer churn. Larger customers can expand while smaller customers cancel. Net revenue retention combines expansion, contraction, and lost revenue.
Cash payback and accounting payback
Accounting payback uses recognized contribution profit. Cash payback follows actual payment timing and successful collections. Annual prepayments can accelerate cash recovery substantially.
Delayed collections create the opposite effect. Failed payments and refunds reduce available cash. Both measurements deserve attention during planning.
Using LTV and CAC together
Lifetime value estimates future customer contribution. CAC represents the investment needed to acquire that customer. Their ratio summarizes acquisition efficiency.
A strong ratio cannot replace cash-flow analysis. Very long payback periods can strain working capital. Balance growth, retention, margin, and liquidity carefully.
Scenarios, sensitivity, and cohorts
Scenario comparisons test pricing and channel decisions. Sensitivity tables reveal assumptions controlling payback most strongly. Goal seeking converts targets into required operating values.
Cohort analysis uses actual customer groups. It exposes changing acquisition quality and retention. Conservative assumptions create more dependable planning decisions.
Calculation steps
- Choose a calculation mode and business preset.
- Enter subscription pricing and billing frequency.
- Provide direct CAC or detailed acquisition spending.
- Add monthly service and transaction costs.
- Enter churn, expansion, discounts, and trial assumptions.
- Configure cash collection and annual prepayment behavior.
- Review payback warnings and the monthly schedule.
- Run scenario, sensitivity, and cohort comparisons.
- Export CSV, PDF, JSON, or a printable report.
Subscription payback questions
What is a subscription payback period?
It is the time required for customer contribution profit to recover acquisition spending.
Should payback use revenue or contribution profit?
Contribution profit is more useful because it subtracts direct service costs.
How does customer churn affect payback?
Churn reduces future active customers and may prevent complete acquisition recovery.
Why is cash payback different from accounting payback?
Cash payback reflects failed payments, prepayments, and collection delays.
How is calculated CAC determined?
Total acquisition spending is divided by new paying customers.
What does the LTV-to-CAC ratio measure?
It compares expected customer value with the acquisition investment.
Can annual billing improve payback?
Upfront annual payments can accelerate cash recovery despite a discount.
Why should I use cohort analysis?
Cohorts reveal changes in retention, pricing, and acquisition quality over time.
What happens when contribution profit is negative?
Payback cannot occur until pricing, margin, or direct costs improve.
Can expansion revenue offset churn?
Expansion can improve net revenue retention and shorten payback.
Should setup fees be included?
Include them when they are recurring parts of the customer economics.
How should free trials be modeled?
Enter trial length, trial cost, and the conversion rate.
What is gross revenue retention?
It measures retained recurring revenue before expansion.
What is net revenue retention?
It measures retained revenue after churn, contraction, and expansion.
What projection horizon should I use?
Use enough months to capture expected lifetime and slower recovery cases.
Why use discounted cash-flow LTV?
It recognizes that future cash contribution is worth less than current cash.
Can I compare acquisition channels?
Yes. Add channel spending and customers to calculate channel-specific CAC.
Can I import cohort data?
Yes. Use the provided CSV format for customer cohorts.
Does the calculator store my data?
Local saving uses browser storage only on the current device.
Can results be exported?
The page exports schedule CSV, summary CSV, JSON, PDF, and print output.
Does this replace financial advice?
No. It is a planning tool based on assumptions entered by the user.