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SaaS LTV Calculator
Calculate customer lifetime value from ARPU, gross margin and churn rate. Free SaaS LTV calculator for subscription businesses.
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Time horizon
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Next decision
What should change in the business because of this number?
Customer Lifetime Value tells you the true ceiling on what you can afford to spend acquiring a customer — get this number wrong and every acquisition-spend decision downstream is built on sand.
This calculator uses the standard subscription-business formula: ARPU × gross margin × average customer lifetime, where lifetime is derived from your monthly churn rate.
Free calculator
Customer lifetime value (LTV) calculator
Estimate how much revenue a typical customer generates over their entire relationship with you.
£/mo
%
%
Results
Avg customer lifetime25.0 months
Customer LTV£1.2k
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Why churn dominates LTV
Average customer lifetime is simply 1 divided by monthly churn rate. At 5% monthly churn, average lifetime is 20 months. At 10% churn, it drops to 10 months — halving your LTV even if ARPU and margin stay identical. Small churn improvements compound enormously in LTV terms.
LTV is meaningless without CAC
LTV on its own tells you nothing about whether your business works — it's only useful compared against your customer acquisition cost. A healthy LTV:CAC ratio is generally considered to be 3:1 or higher.
How this calculator works
- Enter your average revenue per user per month.
- Enter your gross margin percentage.
- Enter your monthly churn rate percentage.
- The calculator computes average customer lifetime and total LTV.
Direct answer — SaaS LTV Calculator
Calculate customer lifetime value from ARPU, gross margin and churn rate. Free SaaS LTV calculator for subscription businesses.
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Frequently asked questions
How do I calculate SaaS LTV?
LTV = ARPU × Gross Margin % × Average Customer Lifetime, where average lifetime is 1 ÷ monthly churn rate. Enter your ARPU, gross margin, and monthly churn above for the exact number.
What's a good LTV for a SaaS business?
There's no universal good number — LTV needs to be judged against CAC. A £1,200 LTV against a £150 CAC (8:1 ratio) is excellent; the same LTV against an £800 CAC (1.5:1) signals a broken acquisition model.
Should I use gross margin or net margin in LTV?
Gross margin is standard — it isolates the direct cost of serving a customer from company-wide overhead, which is the correct lens for a per-customer economics calculation.
How do I reduce churn to improve LTV?
The highest-leverage levers are usually onboarding quality (customers who don't reach 'aha moment' in week one churn fastest), pricing-to-value alignment, and proactive intervention with at-risk accounts before they cancel.
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