Usage-Based Revenue Cushion Calculator

Stress-test your usage-priced SaaS revenue and size the reserve required to coast through low-consumption months without slowing hiring, roadmap, or support commitments.

Total trailing-12-month ARR across all customers (USD).
Share of ARR that rises or falls with metered consumption (0-100).
Typical month-over-month swing in billable consumption after seasonality adjustments.
Number of months of downside you want the reserve to backstop.
Optional. Defaults to 30%. Extra cover for billing delays, clawbacks, or macro shocks.
Optional. Defaults to 0%. Expected offset from net expansion, price increases, or minimum commitments.

Financial modeling assumptions vary across companies—cross-check results with your finance partner before adjusting reserves.

Examples

  • ARR $6,000,000, variable 65%, volatility 18%, horizon 3 months ⇒ Reserve needed: $468,000.00 over 3 months. Baseline monthly variable revenue: $325,000.00 • Modeled downside: $58,500.00 per month after expansion offsets • Safety buffer: 30.0%.
  • ARR $4,200,000, variable 60%, volatility 15%, horizon 3 months, expansion offset 10% ⇒ Reserve needed: $220,500.00 over 3 months. Baseline monthly variable revenue: $210,000.00 • Modeled downside: $10,500.00 per month after expansion offsets • Safety buffer: 30.0%.

FAQ

What volatility window should I use?

Start with the standard deviation of monthly usage over the last 6–12 months, then refresh after major product launches, pricing changes, or contract restructures.

How often should I recalculate the cushion?

Refresh the inputs quarterly so the reserve keeps pace with ARR growth, churn, and shifting contract mix across cohorts.

Can I include fixed revenue streams?

Only usage-driven revenue is modeled. Fixed commitments should be excluded or reflected with a variable share of 0%.

How large should the safety buffer be for enterprise-heavy portfolios?

Enterprise contracts often magnify usage swings—raise the buffer toward 40–60% if invoices are lumpy, implementation timelines shift, or clawbacks are common.

Additional Information

  • Monthly variable revenue equals ARR × usage-linked share ÷ 12, keeping retention and annual contracts in the same cadence.
  • Modeled downside reflects volatility minus the expansion offset, so the reserve only covers the real consumption whiplash.
  • Safety buffer layers on an extra cushion for billing delays, clawbacks, FX swings, or macro shocks beyond historical volatility.
  • Result unit: USD held in reserve

Related calculators