Chartered Financial Analyst specializing in venture capital and software-as-a-service (SaaS) finance.
Find out how many users or sales your app needs to cover its costs. Enter any three variables—Total Fixed Costs, Avg. Revenue per User, Avg. Cost per User, or Breakeven Users—to solve for the fourth.
App Breakeven Calculator
App Breakeven Formula
The breakeven formula for a mobile or web app finds the number of users or sales (Q) you must have for your total revenue to equal all fixed and variable costs.
Q = F / (P – V)
Solve for Total Fixed Costs (F):
F = Q * (P – V)
Solve for Avg. Revenue per User (P):
P = (F / Q) + V
Solve for Avg. Cost per User (V):
V = P – (F / Q)
Variables Explained
- Total Fixed Costs (F): Your total, upfront or recurring overhead (e.g., app development cost, server fees, marketing budget, developer accounts).
- Avg. Revenue per User (P): The average price or lifetime value (LTV) you get from one user (e.g., app purchase price, subscription, or ad revenue).
- Avg. Cost per User (V): The average cost of one user. This includes app store fees (e.g., Apple’s 30%), payment processing, and variable server costs.
- Breakeven Users (Q): The total number of users or sales you need to reach $0 in profit.
Related Calculators
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What is an App Breakeven Point?
An **App Breakeven Point** is the exact number of sales or users (Q) your app needs to acquire to cover all your development, marketing, and operational costs. This is the most important calculation for determining if your app idea is financially viable.
**Fixed Costs (F)** are all the costs you pay before you get your first user. This is primarily your total app development cost. It also includes fixed monthly costs like server fees, software subscriptions, and developer program fees (e.g., Apple Developer Program).
**Variable Costs (V)** are the costs tied *directly* to each sale or user. The most significant variable cost is the app store commission. Both Apple’s App Store and the Google Play Store typically take a 15-30% cut of your revenue. This is your (V).
The **Contribution Margin** (P – V) is the profit from a single user that goes toward paying off your fixed development costs. If you sell an app for $4.99 (P) and the app store takes 30% ($1.50) (V), your contribution margin is $3.49. This calculator finds how many $3.49 “profit chunks” you need to cover your total fixed costs.
How to Calculate App Breakeven (Example)
Let’s calculate the breakeven point for a new paid mobile app.
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Identify Total Fixed Costs (F):
You paid a developer $10,000 to build the app. Your (F) is $10,000.
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Identify Avg. Revenue per User (P):
You sell the app for a one-time price of $4.99.
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Identify Avg. Cost per User (V):
The app store takes a 30% commission on each sale. 30% of $4.99 is $1.50 (rounded).
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Apply the Formula: Q = F / (P – V)
First, calculate the contribution margin per sale: $4.99 (P) – $1.50 (V) = $3.49.
Next, divide the fixed costs by this margin:
Q = $10,000 / $3.49 = 2,865.33 -
Conclusion:
You must sell 2,866 copies of your app (you must round up) to pay off your development cost and start making a profit.
Frequently Asked Questions (FAQ)
For a freemium app, (P) is your *Average Revenue Per User (ARPU)*. (V) is your *Average Cost Per User (ACPU)*. (Q) is your total users. This model is more complex, as you must blend revenue from ads and in-app purchases.
If you qualify for the Small Business Program (under $1M/year), your app store commission (V) drops to 15%. For a $4.99 app, your (V) would be $0.75, making your contribution margin $4.24 and lowering your breakeven point significantly.
Yes. You can either add your total marketing budget to **Fixed Costs (F)**, or you can add your *Cost Per Install (CPI)* to your **Variable Cost (V)**. Using CPI in (V) is often more accurate for paid ad campaigns.
Enter your (F) (e.g., $10,000), (V) (e.g., 30% of P, so this is trickier), and your target sales (Q) (e.g., 2,000 users). The formula is `P = F/Q + V`. Since `V = 0.3*P`, you get `P = F/Q + 0.3*P`, which simplifies to `0.7*P = F/Q`, or `P = (F/Q) / 0.7`. So, `P = ($10,000 / 2,000) / 0.7 = $5 / 0.7 = $7.14`. Your price must be $7.14 to break even at 2,000 users.