Global SaaS metric
SaaS LTV Calculator
Estimate customer lifetime value from ARPU and monthly churn.
LTV
$1,600.00
Avg customer lifetime
20.0 months
Lifetime value (LTV) for subscription businesses
What LTV represents
Lifetime value estimates the gross profit you expect from a typical customer over their entire relationship with your product. In SaaS, LTV is usually derived from average revenue per user (ARPU), gross margin, and churn rate.
The simplified formula used here — ARPU × (1 ÷ monthly churn) × gross margin — assumes constant churn and ARPU. Real cohorts curve over time, but this model is standard for quick planning.
Using LTV in decisions
Compare LTV to CAC to ensure acquisition is profitable. A 3:1 LTV:CAC ratio is a widely cited benchmark, though optimal ratios depend on payback period and capital efficiency.
Improve LTV by reducing churn, increasing ARPU through upsells, or improving gross margin (hosting efficiency, support automation). Each lever shows up directly in this calculator.
Frequently asked questions
- ?Should churn be logo churn or revenue churn?
- This calculator uses a single monthly churn percentage. For revenue LTV, use net revenue churn (including expansion). Logo churn understates value when expansion revenue is strong.
- ?What gross margin should I use?
- Use fully loaded COGS: hosting, payment fees, support, and success costs directly tied to serving customers. 70–85% is common for mature SaaS.