LTV Calculator
Calculate Customer Lifetime Value based on average revenue, gross margin, and churn rate. See how small improvements in churn dramatically increase LTV.
Part of our Business Calculators collection.
LTV Calculator
Free online calculator
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SaaS: 70–80%, eCommerce: 30–50%, Services: 50–70%
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For LTV:CAC ratio calculation
How to Use This Calculator
- 1
Enter average monthly revenue and gross margin.
- 2
Set monthly churn rate.
- 3
Optionally add CAC for LTV:CAC ratio.
- 4
See LTV and average customer lifetime.
LTV Formula
Avg Customer Lifetime = 1 / Monthly Churn Rate LTV = Avg Monthly Revenue × Gross Margin × Avg Lifetime Example: $99 ARPU, 70% margin, 2% churn Lifetime = 1/0.02 = 50 months LTV = $99 × 0.70 × 50 = $3,465 Reducing churn from 3% → 2% = LTV +50%
Example Calculation
Example: $99 ARPU, 70% margin, 2% churn
Inputs
avgMonthlyRevenue: 99grossMargin: 70monthlyChurnRate: 2cac: 500
Result
LTV: $3,465 | LTV:CAC = 6.9:1
$99 × 0.70 × (1/0.02) = $99 × 0.70 × 50 = $3,465.
Frequently Asked Questions
Why does churn have such a huge impact on LTV?
Because LTV = Revenue/Churn, it's inversely proportional. Cutting churn in half doubles LTV. Going from 4% to 2% monthly churn doesn't just improve retention — it doubles every customer's lifetime value.
Should I use monthly or annual LTV?
Calculate monthly LTV for internal analysis. For investor conversations, annual LTV and ARR are more common. Be consistent in your definitions.