Rex says
Money math without the spreadsheet headache. Plug in your numbers and I'll show you exactly where the dollars land.
Try a scenario
Click to load — tweak from there.Inputs
Result
Gross profit per free signup
$11.33
Monthly profit from the free funnel
$90,632
Break-even conversion rate
0.33%
Expected gross profit per signup
$13.08
Serving cost per free signup
$1.75
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Got your number — what next?
Pick one, it takes 20 secondsHow to use this
- 1Enter free signups per month.
- 2Enter free-to-paid conversion rate (%).
- 3Enter paid arpa ($/mo).
- 4Enter gross margin on paid (%).
- 5Enter average paid lifetime (months).
- 6Enter cost to serve a free user ($/mo).
- 7Enter average months a free user stays active (months).
- 8Read your gross profit per free signup on the right — it updates as you type.
- 9Hit Share to keep the scenario or send it to someone.
About this calculator
Free users are not free — they consume hosting, support, and product attention. Freemium works only when the gross profit from converted users exceeds the cost of serving everyone who never converts. This calculator takes your free signup volume, conversion rate, paid ARPA, and the monthly cost of serving a free user, then reports the profit per free signup and the break-even conversion rate your model requires. Products with near-zero marginal serving cost can survive 1% conversion; anything compute-heavy usually needs 3-5% or a hard usage cap on the free tier.
Worked example
Using the values the calculator loads with:
Inputs
- Free signups per month: 8000
- Free-to-paid conversion rate: 2.5 %
- Paid ARPA: 29 $/mo
- Gross margin on paid: 82 %
- Average paid lifetime: 22 months
- Cost to serve a free user: 0.35 $/mo
- Average months a free user stays active: 5 months
Results
- Gross profit per free signup: $11.33
- Monthly profit from the free funnel: $90,632.00
- Break-even conversion rate: 0.33%
- Expected gross profit per signup: $13.08
- Serving cost per free signup: $1.75
What each field means
Inputs
- Free signups per month
- The free signups per month used in the calculation. Starts at 8000 so you have a working example on load.
- Free-to-paid conversion rate (%)
- The free-to-paid conversion rate used in the calculation, measured in %. Starts at 2.5 % so you have a working example on load. Accepted range: 0.01–100 %.
- Paid ARPA ($/mo)
- The paid arpa used in the calculation, measured in $/mo. Starts at 29 $/mo so you have a working example on load.
- Gross margin on paid (%)
- The gross margin on paid used in the calculation, measured in %. Starts at 82 % so you have a working example on load. Accepted range: 1–100 %.
- Average paid lifetime (months)
- The average paid lifetime used in the calculation, measured in months. Starts at 22 months so you have a working example on load.
- Cost to serve a free user ($/mo)
- The cost to serve a free user used in the calculation, measured in $/mo. Starts at 0.35 $/mo so you have a working example on load.
- Average months a free user stays active (months)
- The average months a free user stays active used in the calculation, measured in months. Starts at 5 months so you have a working example on load.
Results
- Gross profit per free signup
- Returned as a money amount in US dollars and shown as the headline result. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Monthly profit from the free funnel
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Break-even conversion rate
- Returned as a percentage. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Expected gross profit per signup
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Serving cost per free signup
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
FAQ
What conversion rate is typical for freemium?
Self-serve products commonly land between 1% and 5%, with 2-3% a reasonable planning assumption. Products with a hard collaboration or storage limit convert higher; unlimited free tiers convert lowest because there's no forcing function.
Should acquisition cost be in this model?
This tool isolates the free-tier serving economics. If your free signups come from paid channels, add that CAC per signup to the cost side — many freemium models are profitable on serving cost and unprofitable once paid acquisition is included.
Is free trial better than freemium?
Trials convert much higher (often 15-25% for opt-in trials) but generate far fewer signups and no organic word-of-mouth surface. Freemium wins when free users create network effects, content, or referrals; trials win when serving cost per user is meaningful.
How do I improve conversion without gating everything?
Gate on a value metric the successful user naturally outgrows — collaborators, projects, exports, API calls — rather than crippling core functionality. Users who hit a limit while succeeding convert; users who hit a wall before value abandon.
Accuracy and limitations
- Results are estimates before tax, fees, and inflation unless an input explicitly covers them.
- Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.
- This is educational maths, not financial advice. Check anything contractual with the lender or your accountant.
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Cite this calculator
Writing about this topic? Grab a citation — every link helps keep these tools free.
RevenueLab. (2026). Freemium Conversion Economics Calculator. Retrieved from https://www.revenuelab.fyi/toolbox/saas-freemium-conversion
<p>Source: <a href="https://www.revenuelab.fyi/toolbox/saas-freemium-conversion" target="_blank" rel="noopener">Freemium Conversion Economics Calculator — RevenueLab</a> (2026).</p>
Source: [Freemium Conversion Economics Calculator — RevenueLab](https://www.revenuelab.fyi/toolbox/saas-freemium-conversion) (2026).