Customer Lifetime Value (LTV) Calculator
Work out what a customer is really worth — gross-margin-adjusted lifetime value from your ARPA, margin and churn.
This free LTV calculator works out what a customer is really worth over their whole relationship. Enter your average revenue per account, gross margin and monthly churn rate, and it returns the expected customer lifespan and a gross-margin-adjusted lifetime value — plus your LTV:CAC ratio if you add acquisition cost.
LTV (customer lifetime value) is one half of SaaS unit economics; CAC is the other. Together they answer the question underneath every growth plan: is a customer worth more than it costs to win them — and by enough of a margin to fund the business?
How to calculate LTV
Start with expected lifespan: at a steady monthly churn rate, the average customer stays 1 ÷ churn months — 2.5% monthly churn means a 40-month lifetime. Then multiply monthly revenue per account by gross margin by that lifespan. Using margin rather than raw revenue matters: the payback for acquisition spend has to come out of what a customer contributes after the cost of serving them.
Treat the result as an estimate, not an asset. It assumes today's churn rate holds for years, which flatters young companies whose oldest cohorts haven't aged yet. The conservative cross-check is realized LTV — revenue actually collected per customer — which only counts money in the door.
Lifespan = 1 ÷ monthly churn rate. LTV = ARPA × gross margin % × lifespan.
A customer paying $200/month at 75% gross margin with 2.5% monthly churn stays about 40 months: LTV = $200 × 0.75 × 40 = $6,000. Against a $2,000 CAC that is a 3:1 LTV:CAC ratio — right on the classic healthy benchmark.
Stop estimating. See your real numbers.
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