Definition
A renewal forecast estimates how much recurring revenue will renew in a future period based on contract terms, churn risk, and expansion expectations.
Example
A $2M renewal pool with 90% probability yields a $1.8M base forecast before expansion.
How to use it
- Build forecasts from contract-level data (term end dates, price, usage).
- Separate renewal probability from expected expansion to avoid double counting.
- Track forecast accuracy by segment to improve weighting.
- Use risk tiers so leaders can see base, target, and downside views.
Common mistakes
- Assuming all renewals happen on time without slippage.
- Double counting expansion in both renewal and upsell forecasts.
- Ignoring product usage signals that flag churn risk early.
Why this matters
This term matters because small changes compound in SaaS metrics. Use consistent definitions by cohort and segment so you can diagnose retention, payback, and growth quality.
Practical checklist
- Write a 1-line definition for "Renewal Forecast" that your team will use consistently.
- Keep the time window consistent (weekly/monthly/quarterly) when comparing trends.
- Segment results (channel/plan/cohort) before drawing big conclusions from blended averages.
- Sanity-check with a related calculator from the same category on MetricKit.
- Read the related guide (e.g., Sales ops metrics hub: quota, pipeline, win rate, and capacity planning) for context and common pitfalls.
Where to use this on MetricKit
Calculators
- Net New MRR Calculator: Calculate net new MRR from new, expansion, contraction, and churned MRR.
- MRR Waterfall Calculator: Build an MRR waterfall: starting MRR + new + expansion - contraction - churn = ending MRR.
- SaaS Quick Ratio Calculator: Calculate the SaaS quick ratio: (new + expansion) / (contraction + churn).
- Rule of 40 Calculator: Calculate the Rule of 40 score: growth rate (%) + profit margin (%).
- Net New ARR Calculator: Calculate net new ARR from new, expansion, contraction, and churned ARR movements.
Guides
- Sales ops metrics hub: quota, pipeline, win rate, and capacity planning: A practical hub for sales ops planning: quota attainment, pipeline coverage, required pipeline, sales capacity with ramp, and OTE math.
- Retention & churn hub: cohorts, GRR/NRR, and retention curves: A practical hub for retention measurement: churn rate, GRR/NRR, cohort retention curves, and how to set retention targets without getting misled by noise.