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LTV Calculator
Estimate SaaS customer lifetime value from ARPA, margin, and churn.
GROSS-PROFIT LTV FOR SAAS
Estimate customer lifetime value
Directional SaaS estimate only. The inverse-churn method assumes stable ARPA, gross margin, and monthly churn and does not discount future cash flows. Currency selection changes formatting, not values.
THE BASICS
What is a customer lifetime value calculator?
A customer lifetime value calculator estimates how much revenue and gross profit an average customer may generate before churning. For subscription businesses, LTV turns ARPA, margin, and retention into one planning metric.
Calculate monthly revenue per account with the MRR Calculator, and measure the matching customer-loss rate with the Churn Calculator.
SaaS customer lifetime value formula
Estimated lifetime (months) = 1 ÷ monthly customer churn rateRevenue LTV = monthly ARPA ÷ monthly customer churn rateGross-profit LTV = monthly ARPA × gross margin ÷ monthly customer churn rateThe rates must use decimal form inside the calculation. For example, 4% monthly churn is 0.04. This SaaS LTV calculator handles that conversion automatically.
Revenue LTV versus gross-profit LTV
Revenue LTV measures top-line subscription revenue. Gross-profit LTV applies gross margin so infrastructure, support, payment processing, and other direct service costs are not treated as economic value.
Founders should generally compare gross-profit LTV with the CAC Calculator. The LTV:CAC Ratio Calculator combines those metrics directly.
SaaS LTV example
A SaaS product with $100 monthly ARPA, 80% gross margin, and 4% monthly customer churn has an implied lifetime of 25 months and estimated gross-profit LTV of $2,000.
| Result | Metric | Result |
|---|---|---|
| Monthly ARPA | $100.00 | |
| Gross margin | 80.00% | |
| Monthly customer churn | 4.00% | |
| Implied lifetime | 25.00 months | |
| Revenue LTV | $2,500.00 | |
| Gross-profit LTV | $2,000.00 | |
| Annualized retention | 61.27% |
When this LTV estimate is useful
Use the inverse-churn method for fast planning when your subscription base is reasonably mature and ARPA, margin, and churn are stable. Recalculate by plan, customer size, and acquisition channel when blended averages hide meaningful differences.
Use cohort survival curves, contribution-margin cash flows, and discounting when retention changes with customer age or when long customer lifetimes make timing material. LTV is an estimate—not permission to spend the full amount upfront. Pair it with CAC payback, cash runway, and the SaaS Pricing Calculator.
COMMON QUESTIONS
Customer lifetime value questions
What does LTV mean?
LTV means customer lifetime value. It estimates the revenue or gross profit an average customer contributes across the full relationship with your business.
Should SaaS LTV use revenue or gross profit?
Use gross-profit LTV for acquisition and unit-economics decisions because it accounts for direct service-delivery costs. Revenue LTV is still useful as a top-line reference, so this calculator shows both.
Should I use customer churn or revenue churn?
This inverse-churn formula uses customer churn, also called logo churn. Revenue churn and NRR answer different retention questions and should not be substituted without changing the model.
Why can’t I enter 0% churn?
Dividing by zero would imply an infinite customer lifetime. If you have not observed churn yet, use a conservative scenario or cohort data instead of treating a short zero-churn period as permanent.
Is customer lifetime always 1 divided by churn?
No. It is a planning shortcut that assumes a stable churn rate. Cohort-based survival analysis is more appropriate when retention changes materially with customer age, plan, or segment.
Can I multiply monthly churn by 12?
Not for annual retention. Monthly retention compounds, so annual retention equals one minus monthly churn, raised to the twelfth power. The calculator performs that compounding.