LTV Calculator: Customer Lifetime Value

In marketing and SaaS, LTV means Customer Lifetime Value, the total gross profit a customer generates over their entire relationship with your business. It is also called CLV (Customer Lifetime Value). This is different from loan LTV (Loan-to-Value), which measures how much you can borrow against an asset like a home or car.

The standard SaaS formula is LTV = (ARPU × Gross Margin) ÷ Churn Rate. Enter average revenue per user, gross margin percentage, and monthly churn into this calculator for an instant result. Example: $100/month ARPU, 80% margin, and 3% monthly churn → $80 monthly contribution ÷ 0.03 = $2,667 LTV per customer.

Enter three inputs: ARPU (average monthly revenue per customer), gross margin as a percentage, and monthly churn rate. The calculator applies the formula automatically. Try adjusting churn, dropping from 5% to 3% can increase LTV by 67% at the same ARPU, which is why retention is often the highest-leverage LTV lever.

Use monthly churn for businesses with monthly billing cycles. If you only have annual churn, convert it first: monthly churn ≈ 1 − (1 − annual churn)^(1/12). Using annual churn directly in the monthly formula will dramatically overstate LTV, one of the most common calculation mistakes in SaaS.

Pros: fast scenario modeling, easy segment comparisons, and a direct link to CAC and payback decisions without building spreadsheets. Cons: the simple formula assumes steady churn and flat ARPU, ignores expansion revenue unless you adjust inputs, and overstates value if you use revenue instead of gross margin. Use it for planning and direction; validate with cohort analysis as you scale.

No, this tool calculates Customer Lifetime Value for marketing and SaaS unit economics, not Loan-to-Value for mortgages or car finance. Loan LTV compares your loan amount to an asset's appraised value (e.g., an 80% LTV mortgage on a $400,000 home means an $320,000 loan). If you arrived from a borrowing search, you need a mortgage or loan LTV calculator instead.

LTV depends on ARPU, gross margin, and churn, not a fixed dollar amount. A "good" LTV is one that supports at least a 3:1 LTV:CAC ratio and CAC payback under 12 months. Use this calculator with your CAC to check unit economics on our LTV:CAC ratio tool or Growth Dashboard.