LTV Calculator

Calculate customer lifetime value from revenue, gross margin, churn, lifespan, or purchase behavior.

By CalcMastery Editorial Team

LTV Calculator (Customer Lifetime Value)

Estimate customer lifetime value using subscription, churn-based, or transactional models. Optionally include CAC to see LTV:CAC and payback period. Uses best-practice formulas with clear guidance.

Subscription (Lifespan)Churn-based (SaaS)Transactional (E‑commerce)

Choose the model that fits your business. Each model shows the relevant inputs.

$

Average revenue per user per month. Example: 30 means $30/user/month.

%

Contribution margin after variable costs. Example: 75% leaves 25% variable cost.

Expected active months for a typical customer.

%

Percentage of customers who cancel each month. Example: 5%.

Use discounted retention formula for a more conservative, finance-friendly estimate.

%

Finance discount rate (annual). Converted to monthly internally.

$

Average revenue per purchase.

Average purchases per customer per month.

Duration the average customer remains active.

Add customer acquisition cost to see LTV:CAC ratio and payback period.

$

Average marketing + sales cost to acquire one new customer.

Scenarios
Example profiles: Early‑stage SaaS / Mid‑market SaaS / E‑commerce
Early‑stage SaaSMid‑market SaaSE‑commerce

Results

  • Lifetime Value (LTV)$
  • LTV:CAC (x)—
  • CAC Payback (months)—
  • Category—
  • Monthly Contribution$
  • Lifetime Revenue (pre‑margin)$
  • CAC$
  • Surplus over CAC$
  • Model Used—

Enter your inputs above to calculate the results.

Use this LTV calculator to estimate customer lifetime value from monetization, margin, and retention assumptions. Enter average revenue per account, gross margin, churn rate, lifespan, or purchase behavior depending on your model. The calculator returns lifetime value so you can compare customer value with acquisition cost, retention work, and pricing decisions.

Formula

Subscription LTV = ARPA x Gross margin % / Churn rate
Lifespan LTV = Revenue per period x Gross margin % x Customer lifespan
Transactional LTV = Average order value x Purchase frequency x Gross margin % x Customer lifespan

Use ARPU, AOV, Customer Churn Rate, and LTV:CAC Ratio to validate the inputs around this estimate.

Common mistakes

  • Using revenue instead of gross profit when CAC payback or acquisition efficiency is the question.
  • Using monthly churn with annual revenue, or annual churn with monthly revenue.
  • Assuming churn stays constant when customer cohorts, pricing, or product maturity change.

How to Use the LTV – Lifetime Value Calculator

Select the business model that matches your revenue structure, enter your pricing, margin, retention, and CAC inputs, and the calculator will instantly compute LTV, LTV:CAC, CAC payback, and unit-economics quality.

Select your model

  • Choose Subscription (Lifespan), Churn-based (SaaS), or Transactional (E-commerce) to load the correct inputs and formulas.

Enter your revenue inputs

    • For subscription/SaaS models, fill in Monthly ARPU.

- For e-commerce, fill in Average Order Value and Purchase Frequency.

Set retention or lifecycle values

    • Subscription: enter Average Lifespan (months).

- Churn-based: enter Monthly Churn Rate and optionally apply a Discount Rate. - Transactional: enter Customer Lifecycle (months). - Example formulas used by the tool: Subscription:

LTV = ARPU × Margin × Lifespan

Churn-based:

LTV = (ARPU × Margin) / (Churn + Discount)

Transactional:

LTV = AOV × Frequency × Lifecycle × Margin

Add gross margin and CAC

    • Fill in Gross Margin (%) to convert revenue into contribution profit.

- Toggle Include CAC if you want LTV:CAC and CAC payback.

Review the results

  • The Results panel shows LTV, LTV:CAC, CAC Payback, Monthly Contribution, Lifetime Revenue, Surplus over CAC, and your chosen model.

Frequently Asked Questions

Which LTV model tab should I use: Subscription (Lifespan), Churn-based (SaaS), or Transactional (E-commerce)?

Use Subscription (Lifespan) when you already estimate customer lifespan, Churn-based when you track monthly churn, and Transactional when revenue comes from order frequency rather than subscriptions.

How exactly is LTV calculated in this calculator for each model?

Subscription (Lifespan):

LTV = Monthly ARPU × Gross Margin × Average Lifespan (months)

Churn-based (SaaS):

LTV = (Monthly ARPU × Gross Margin) / (Monthly Churn Rate + Monthly Discount Rate)

Transactional (E-commerce):

LTV = AOV × Purchase Frequency × Customer Lifecycle (months) × Gross Margin
Why does the calculator ask for gross margin—can’t I just use revenue LTV?

Gross-margin LTV gives profit-based customer value. Revenue-based LTV is misleading because it ignores cost of goods, so margins make the metric usable for real unit-economics decisions.

What is a good LTV:CAC ratio and how should I interpret the Category and Surplus over CAC?

Healthy SaaS and e-commerce businesses typically aim for 3:1 or higher. Category and Surplus over CAC help you see if each customer is producing enough profit after acquisition costs.

Sources & Methodology