Is LTV the same as profit?
No. This version estimates revenue; costs and gross margin require additional analysis. A profit-based LTV multiplies the result by gross margin.
SaaS Lifetime Value Calculator - CLV and Retention
Estimate recurring customer value from ARPU, churn, acquisition cost, and growth.
Use the estimate to connect retention work with acquisition spending and revenue planning.
Customer value assumptions
Enter monthly SaaS metrics for one representative customer cohort.
About SaaS lifetime value
Customer lifetime value, often called LTV or CLV, is an estimate of the revenue a typical customer can generate before leaving. The SaaS lifetime value calculator starts with average monthly revenue per user and divides it by monthly churn to estimate a customer lifetime. It then applies the stated monthly growth rate to ARPU. The result is useful for comparing retention and acquisition decisions, but it is not a complete profit forecast. Churn is especially influential. A monthly churn rate of 5 percent implies an average simple lifetime near twenty months, while 10 percent implies about ten months. Small retention improvements can therefore have a large effect on LTV. Measure churn consistently: logo churn, revenue churn, and gross or net churn answer different questions. Use a cohort definition that matches the customers whose ARPU you enter. CAC represents the fully loaded cost of acquiring a customer. The LTV-to-CAC ratio compares lifetime revenue with that cost, but revenue is not gross margin. Hosting, support, payment processing, onboarding, commissions, and product costs should be considered before deciding whether acquisition is profitable. A low CAC may also be temporary if a campaign reaches an unusually easy audience. The current customer count is used to show present monthly revenue at the entered ARPU. It does not forecast new business, expansion, contraction, or seasonality. For a detailed model, separate plans, segments, and acquisition cohorts, then track actual renewals. Use this quick view to test assumptions, identify which metric matters most, and bring realistic ranges to pricing, retention, and budget conversations. For subscription businesses with annual plans, convert revenue and churn into comparable monthly measures before using the tool. Free users, trials, reactivations, refunds, and nonrecurring setup fees should not be mixed into a paid-customer cohort without an explicit policy. Consistent definitions make changes in LTV meaningful over time.
SaaS lifetime value examples
Each example uses monthly revenue and churn assumptions.
| Customer profile | Lifetime value | Planning note |
|---|---|---|
| $50 ARPU, 5% churn, 10% growth | $1,100.00 | A twenty-month simple lifetime. |
| $100 ARPU, 10% churn, 0% growth | $1,000.00 | A ten-month simple lifetime. |
| $50 ARPU, 2.5% churn, 10% growth | $2,200.00 | Halving monthly churn doubles estimated lifetime and LTV. |
How to calculate SaaS customer lifetime value
- Enter monthly ARPU for a defined customer group.
- Enter churn as a monthly percentage.
- Add CAC, customer count, and expected ARPU growth.
- Compare the LTV-to-CAC ratio with gross-margin and payback data.
SaaS lifetime value FAQ
Why can churn not be zero?
A zero churn rate would imply an unlimited lifetime in this simplified formula. Enter a small positive churn rate that matches observed retention.
Which churn definition should I use?
Use the churn measure that matches your ARPU and cohort reporting method. Mixing logo churn with revenue churn can distort lifetime value.
What is a good LTV-to-CAC ratio?
Targets vary by margin, payback period, growth stage, and cash availability. Many teams treat a ratio above 3 as healthier than a ratio near 1, but unit economics still matter.