Recurring Revenue Calculator
Explore recurring revenue and customer churn for a telecoms reseller, with simplified estimates of customer lifetime and revenue value.
Paying customers at the start of the month.
Recurring only, excluding VAT and one-off charges.
Use the same starting base and measurement period.
- Monthly recurring revenue
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- Annual recurring revenue
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- Monthly churn rate
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- Annual churn rate
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- Average customer lifetime
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- Customer lifetime value
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What the calculator does
Monthly recurring revenue is the starting customer count multiplied by average monthly recurring spend. ARR multiplies that result by twelve. Monthly customer churn divides customers lost by the starting base; the annual figure compounds a constant monthly rate over twelve months.
The lifetime estimate is one divided by monthly churn, expressed as a decimal. Revenue lifetime value multiplies that estimated lifetime by average monthly spend. Both assume unchanged spending and a constant churn probability, so they are scenario estimates rather than measured customer outcomes.
Interpreting the reseller scenario
Use recurring service charges excluding VAT, installation, hardware and variable usage. A large multi-site customer and a small voice account can have different commercial values, which an average will not show.
The model excludes expansion and contraction among customers who stay. It also excludes supplier costs and payment timing. Review margin, changes in the service base and outstanding invoices separately.
For a practical account review, connect these measures with the services and contracts held in your CRM and billing records.
Questions About These Figures
How is customer lifetime value calculated here?
It divides average monthly recurring revenue per customer by the monthly customer churn rate as a decimal. This is a simplified revenue-based estimate that assumes a constant churn rate and unchanged spending. It is not a prediction for an individual account.
Why does the calculator use revenue rather than profit?
The inputs do not include supplier costs. Applying an appropriate gross margin gives a simplified gross-profit lifetime estimate, but acquisition costs, servicing costs and the timing of cash also matter when assessing a customer relationship.
Should usage revenue be included?
Use committed recurring charges for the MRR and ARR outputs. Report variable usage separately; combining it with contracted charges would change the meaning of the measure.
What counts as a customer lost?
Use customers from the starting base who leave entirely during the period. A customer retaining some services while spending less represents contraction, which this calculator does not model.
Is annual recurring revenue just twelve times the monthly figure?
ARR is MRR multiplied by twelve. It annualises the current recurring base and does not forecast future sales, cancellations or price changes.
Does this replace figures from my billing system?
The calculator explores the effect of averages and assumptions. Reconcile operational figures to the active service records and applicable prices before using them for formal reporting.
Review Your Recurring Service Base
We can help you review how service prices, contract dates and account activity support recurring-revenue reporting for your reseller business.
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