Result
Break-even MRR
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This calculation is for informational purposes only and does not replace advice from a qualified professional. Formulas and rates may not fit your exact situation — double-check the figures before making decisions.
How it is calculated
Break-even MRR = fixed costs ÷ (gross margin ÷ 100). Same logic as an ordinary break-even point, except the per-unit margin is replaced with the subscription product's gross margin percentage, and units are replaced with MRR itself.
Gross margin here is what's left from every dollar of MRR after direct costs of serving customers (servers, support, payment processing), but before fixed costs for the team, office and acquisition. That share is what covers fixed costs.
While current MRR is below break-even, the company runs at a loss covered by investment or its own reserves; past the break-even point, every extra dollar of MRR (net of its serving costs) flows into operating profit.