Skip to main content
💰Interactive Tool

Customer LTV Calculator

Calculate Customer Lifetime Value from your ARPU, gross margin, and churn rate. Understand how much revenue each customer generates over their lifetime.

LTV Formula

ARPU×Gross Margin×1 / Churn Rate=LTV
ARPU: Average Revenue Per User per month
Gross Margin: Revenue minus cost of goods sold (%)
Churn Rate: % of customers lost per month

Your Numbers

per user per month
10%95%
0.5%20%
Customer Lifetime Value
$700
Average LTV
Avg. Customer Lifespan
20.0 months
(1.7 years)
Monthly ARPU
$50
Annual Churn
60%
approx. annualized

SaaS LTV Benchmarks

$10K+
Enterprise SaaS — Long contracts, low churn, high ARPU
$5K-$10K
Mid-market SaaS — Strong unit economics, sustainable growth
$1K-$5K
SMB SaaS — Typical for self-serve SaaS products
Under $1K
Consumer / Freemium — Focus on reducing churn to increase LTV

Email Me These Results

Get your calculation + related frameworks and templates.

or use email

Get this + weekly PM tools and templates.

LTV Deep Dive

Learn advanced LTV models, cohort analysis, and strategies to increase lifetime value.

Churn Rate Calculator

Calculate and benchmark your churn rate with SaaS industry data.

Continue your workflow

LTV/CAC Ratio

Unit economics health

Churn Calculator

Key LTV input

Pricing Model

Optimize for LTV

Understanding Customer Lifetime Value

LTV estimates the total revenue a customer generates over their entire relationship with your product. It's the most important metric for understanding whether your business model works: if LTV exceeds customer acquisition cost (CAC), you have a viable business. Read our LTV metric guide for detailed formulas and benchmarks.

Related SaaS Metrics

LTV is driven by three inputs: average revenue per user (MRR), gross margin, and churn rate. Improving any of these increases LTV. Check your LTV:CAC ratio to assess unit economics health, and your Quick Ratio to see if you're growing faster than you're churning. For a complete picture, use the Unit Economics Dashboard.

FAQ

How is Customer Lifetime Value calculated?

The simplest formula: ARPU x gross margin / churn rate. For example: $100 ARPU x 80% margin / 5% monthly churn = $1,600 LTV.

What is a good LTV:CAC ratio?

3:1 is the standard benchmark. Below 1:1 means you lose money per customer. Above 5:1 may mean you're underinvesting in growth. Use the LTV:CAC calculator to check yours.