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SaaS Lifetime Value Calculator

Calculate LTV from ARPA, gross margin, and churn or lifespan. Optional LTV:CAC.

Use the SaaS Lifetime Value Calculator

Enter ARPA, gross margin %, and either monthly churn or average lifespan. LTV and optional LTV:CAC are calculated.

Revenue & churn

ARPA/ARPU per month, gross margin %. Then monthly churn % or average lifespan (months). Optional CAC for LTV:CAC.

Results

LTV (gross profit)
$1,250
Avg customer lifespan
33.3 months

Lifespan from churn ≈ 1 / churn rate. LTV = Gross profit per month × Lifespan. LTV:CAC = LTV ÷ CAC.

What this metric means

LTV is the expected gross profit from a customer over their lifetime. It drives how much you can spend to acquire them (CAC) and payback.

How to calculate it

Gross profit per month = ARPA × Gross margin %. Lifespan = 1 ÷ Monthly churn (or use average lifespan directly). LTV = Gross profit per month × Lifespan.

How to improve the metric

Increase ARPA (upsell, price); improve margin; reduce churn to extend lifespan. All raise LTV and support higher CAC and better unit economics.

Common mistakes

Using revenue instead of gross profit without saying so; ignoring cohort vs aggregate churn; or applying annual churn as if it were monthly.

How to interpret your result

Compare LTV to CAC (LTV:CAC). Use LTV for payback (CAC ÷ gross profit per month) and for capacity planning. Track over time and by segment.

FAQs

What is LTV?▾
Lifetime value = gross profit you expect from a customer over their lifetime. LTV = Gross profit per month × Average lifespan (months).
How do I get lifespan from churn?▾
Average customer lifespan ≈ 1 ÷ Monthly churn rate. E.g. 3% monthly churn → lifespan ≈ 33 months. This is a simple approximation.
Why gross profit?▾
LTV is often calculated on gross profit (after COGS) to reflect margin. Use revenue-based LTV if you prefer; be consistent with CAC and payback.
What is LTV:CAC?▾
LTV ÷ Customer acquisition cost. Healthy SaaS often targets 3:1 or higher. Enter CAC in the calculator to see the ratio.

Related tools

Browse all calculators on NetGrow.

NetGrow

SaaS Lifetime Value Calculator

Calculate LTV from ARPA, gross margin, and churn or lifespan. Optional LTV:CAC.

Use the SaaS Lifetime Value Calculator

Enter ARPA, gross margin %, and either monthly churn or average lifespan. LTV and optional LTV:CAC are calculated.

Revenue & churn

ARPA/ARPU per month, gross margin %. Then monthly churn % or average lifespan (months). Optional CAC for LTV:CAC.

Results

LTV (gross profit)
$1,250
Avg customer lifespan
33.3 months

Lifespan from churn ≈ 1 / churn rate. LTV = Gross profit per month × Lifespan. LTV:CAC = LTV ÷ CAC.

What this metric means

LTV is the expected gross profit from a customer over their lifetime. It drives how much you can spend to acquire them (CAC) and payback.

How to calculate it

Gross profit per month = ARPA × Gross margin %. Lifespan = 1 ÷ Monthly churn (or use average lifespan directly). LTV = Gross profit per month × Lifespan.

How to improve the metric

Increase ARPA (upsell, price); improve margin; reduce churn to extend lifespan. All raise LTV and support higher CAC and better unit economics.

Common mistakes

Using revenue instead of gross profit without saying so; ignoring cohort vs aggregate churn; or applying annual churn as if it were monthly.

How to interpret your result

Compare LTV to CAC (LTV:CAC). Use LTV for payback (CAC ÷ gross profit per month) and for capacity planning. Track over time and by segment.

FAQs

What is LTV?▾
Lifetime value = gross profit you expect from a customer over their lifetime. LTV = Gross profit per month × Average lifespan (months).
How do I get lifespan from churn?▾
Average customer lifespan ≈ 1 ÷ Monthly churn rate. E.g. 3% monthly churn → lifespan ≈ 33 months. This is a simple approximation.
Why gross profit?▾
LTV is often calculated on gross profit (after COGS) to reflect margin. Use revenue-based LTV if you prefer; be consistent with CAC and payback.
What is LTV:CAC?▾
LTV ÷ Customer acquisition cost. Healthy SaaS often targets 3:1 or higher. Enter CAC in the calculator to see the ratio.

Related tools

Browse all calculators on NetGrow.