LTV / CLTV Calculator

What is LTV?

Lifetime value (LTV) estimates the gross-profit dollars you expect from a customer over their life. This version uses ARPA, gross margin, and monthly churn, a standard SaaS heuristic rather than a cohort model.

Formula

Version v1. See methodology and the public formula repo for sources and change history.

Worked example

Using the default example inputs (Monthly ARPA: $500.00; Gross margin: 75%; Monthly churn: 3%), LTV equals $12,500 (Gross profit LTV). LTV becomes fragile when churn is low or poorly measured; treat this as a heuristic.

What good looks like

Treat LTV as directional. Pair it with measured cohort retention when available. Very high LTV often means churn is understated or expansion is folded in elsewhere.

Directional guidance only, not a cohort benchmark claim. Premium cohort bands appear when sample thresholds are met for your profile.

FAQ

What is LTV?

Lifetime value (LTV) estimates the gross-profit dollars you expect from a customer over their life. This version uses ARPA, gross margin, and monthly churn, a standard SaaS heuristic rather than a cohort model.

What is the LTV formula?

LTV = ARPA * Gross margin / Monthly churn rate

Is this gross or net LTV?

Gross-profit LTV: ARPA times gross margin divided by monthly churn. It excludes discount rates and variable costs below gross margin.

Why is churn in the denominator?

The classic SaaS formula approximates expected lifetime as 1 divided by monthly churn rate. Use consistent churn definitions (logo vs revenue) when comparing periods.

When should I use cohort LTV instead?

When you have enough history to observe actual retention curves, especially for enterprise or multi-year contracts.