Calculate SimplyHow to use
Start with the worked example to understand the inputs, then replace every relevant value with your own figures. Use one currency and consistent units throughout. Add or remove rows where offered; irrelevant conditional fields are disabled and excluded. Select Calculate after editing. Review negative values and any “not determined” result rather than assuming every scenario must be profitable. Download a text summary or print the page for your records.
Formula and assumptions
Treat active users as one fixed cohort: converted users leave the free group and join the paid group. Operating cost is free users times free-user cost, plus paid users times paid-user cost, plus entered fixed overhead. Required paid users solve revenue minus costs at the chosen operating margin and round up to whole users. If contribution is insufficient or required users exceed the entire cohort, the target is not reachable under these inputs. This is operating margin after entered costs, not automatically accounting gross margin. Acquisition cost, churn and taxes require separate modeling.
required paid users = ceil[(total users × free cost + fixed cost) / (price × (1−margin) − paid cost + free cost)]
Worked example
Example only: replace rates with your own figures.
Inputs
- Total active user cohort: 10000
- Currently paying users within cohort: 200
- Monthly cost per free user: 0.1
- Monthly variable cost per paid user: 2
- Monthly paid subscription price: 10
- Monthly fixed operating cost: 500
- Target operating margin after entered costs: 30 %
- Break-even paid users: 186
- Target-margin paid users: 295
- Required conversion rate: 2.95 %
- Current monthly revenue: 2000 USD
- Current monthly operating cost: 1880 USD
- Current monthly operating profit: 120 USD
Frequently asked questions
Are the example rates current market prices?
No. Example inputs demonstrate arithmetic, not live prices, tax rules, salary surveys or sponsor benchmarks. Enter a dated quote, bill, manufacturer specification or verified fee schedule that applies to your situation. Compare a conservative and an optimistic scenario separately.
Why is a result not determined?
Some calculations have no meaningful value when a denominator is zero, savings are non-positive, a target cannot be reached or your data do not bracket an intersection. The tool leaves that result undetermined instead of displaying infinity or inventing a recommendation. Check the method and your inputs.
Sources
Sources explain the underlying concepts, not an endorsement of this website or its results. Method review: 20 October 2026.