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LTV calculator.

Work out customer lifetime value for a SaaS from revenue per account, gross margin and churn, and see your LTV:CAC and payback next to it. Looking for loan-to-value? This one measures customers, not mortgages.

Free · Runs in your browser · Formulas shown

Your numbers

Use monthly figures, averaged over the last few months.

$/mo

MRR divided by active customers.

%

Revenue minus hosting, AI, payment and support costs. SaaS is usually 70–85%.

Churn

%
Measured per

Optional

$

For LTV:CAC and payback.

%/yr

Values future revenue less. 10–20% is common.

Building a SaaS?

At 3% monthly churn, each customer is worth $1,333 in gross profit. SyntaxKit is a Next.js starter kit with sign-in, payments and teams built in, so you reach your first paying customer sooner.

Customer lifetime value

$1,333

$40 gross profit a month for 33 months on average.

Gross profit per month
$40
Average lifetime
33.3 months
Discounted LTVat 10%/yr
$1,062
LTV:CAC
3.3:1
CAC payback
10 months
  • Healthy: at or above the common 3:1 target.
  • Payback: Within the common 12-month target.
The math

How customer lifetime value is calculated.

LTV is the gross profit you earn from an average customer before they cancel. The examples below use your numbers from the calculator.
Customer lifetime value

LTV = ARPA × gross margin ÷ monthly churn

($50 × 80%) ÷ 3% = $1,333

An average customer stays 33.3 months (1 ÷ churn).

Discounted LTV

Discounted LTV = ARPA × gross margin × (1 + d) ÷ (d + monthly churn), where d is the monthly discount rate

$1,062

d is the monthly rate for 10% a year. Stays finite even at 0% churn.

LTV to CAC ratio

LTV:CAC = LTV ÷ CAC

$1,333 ÷ $400 = 3.3:1

3:1 or higher is the common target.

CAC payback

CAC payback in months = CAC ÷ (ARPA × gross margin)

$400 ÷ $40 = 10 months

Under 12 months is the common target.

Keep every input on the same period. Monthly ARPA needs monthly churn; mixing a monthly price with annual churn inflates LTV twelve-fold. If you don't know your churn yet, the churn rate calculator works it out from customer counts, and the CAC calculator gives you the acquisition cost.

Benchmarks

What good looks like.

Rules of thumb from published SaaS research. Your market, price point and stage matter more than any single number.
SaaS benchmarks and their sources
MetricBenchmarkSource
LTV:CAC3:1 or higherDavid Skok, SaaS Metrics 2.0
CAC paybackUnder 12 monthsDavid Skok, SaaS Metrics 2.0
CAC payback, reportedAbout 10 months (smaller ARR) to 15 months (larger ARR)OpenView 2023 SaaS benchmarks
Gross marginTypically 70–85%ChartMogul on LTV

Treat LTV as an estimate. ChartMogul found that more than a quarter of cohorts ended up over 50% away from their predicted lifetime value, which is why investors ask for cohort retention once you have the history.

FAQ

LTV questions.

How do you calculate customer lifetime value for SaaS?

Multiply average revenue per account by gross margin, then divide by monthly customer churn. With $50 ARPA, 80% margin and 3% churn, LTV is $50 × 0.8 / 0.03 = $1,333.

What is a good LTV to CAC ratio?

3:1 or higher is the common target, from David Skok's SaaS metrics work. Below 1:1 each customer costs more to win than they return. Well above 5:1 can mean you're growing slower than you could afford to.

Should LTV use revenue or gross margin?

Gross margin. Revenue-based LTV ignores what it costs to serve a customer, and it makes LTV:CAC look better than it is. ChartMogul's default LTV leaves margin out, so check which one a dashboard shows before you compare.

What happens to LTV when churn is 0%?

The simple formula divides by zero and has no upper limit. Use a discounted LTV, which values each future month a little less and stays finite, or cap the lifetime at three to five years. This calculator shows the discounted value when churn is 0%.

What is the difference between LTV, CLV and CLTV?

Nothing. They are three abbreviations for customer lifetime value. SaaS teams tend to say LTV; e-commerce and marketing teams say CLV or CLTV.

Should I use customer churn or revenue churn in LTV?

Customer churn is the standard, because LTV describes an average customer. Revenue churn works when expansion revenue is large, but it breaks down when net revenue churn is negative, since the formula then has no limit.

How do I convert annual churn to monthly churn?

Compound it: monthly = 1 − (1 − annual)^(1/12). 30% a year is 2.93% a month, not 2.5%. Choose 'Year' in the calculator and it does this for you.

Is this a loan-to-value (LTV) calculator?

No. In mortgages, LTV means loan-to-value: the loan amount divided by the property value. This calculator measures customer lifetime value for subscription businesses.

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