How this calculator works
This ltv calculator is designed for SaaS, subscription, and recurring-revenue businesses. Enter your current operating numbers to get a fast directional result.
LTV = ARPU × gross margin ÷ monthly churn rate
Keep the reporting period consistent. Monthly metrics should use monthly revenue, monthly churn, and monthly acquisition counts.
How to use it
- Use clean finance or analytics data from the same period.
- Exclude one-time revenue when calculating recurring revenue metrics.
- Compare the result against prior months to see trend direction, not just one snapshot.
Result interpretation
LTV is highly sensitive to churn and gross margin. Small changes in retention can change the result more than small pricing changes.
FAQ
What is SaaS LTV?
LTV estimates gross profit from one customer over their expected lifetime.
Why use gross margin?
Gross margin makes LTV a profit-based metric rather than a revenue-only metric.
How should I use this result?
Use it as a quick operating metric, then compare it with cohort trends, cash flow, pricing changes, and acquisition channel quality.
Is this calculator exact accounting?
No. It is a planning calculator. Use consistent definitions from your finance reports when making board or investor decisions.