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Business Utility • 100% Free & Client-Side

SaaS Customer Lifetime Value (LTV) Calculator

Calculate customer lifetime value (LTV), average retention lifespan in months, and LTV:CAC ratio benchmarks from ARPU, gross margin, and monthly churn…

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Calculation Formula

Calculates Customer Lifespan = 1 / Monthly Churn Rate; LTV = (ARPU × Gross Margin %) / Monthly Churn Rate; LTV:CAC = LTV / CAC. Benchmarked against venture standard 3.0x to 5.0x healthy scaling ratio.
Disclaimer: Estimates only for educational and planning purposes; not certified financial, tax, or legal advice. Please consult a qualified professional before executing financial commitments.

How to Use the SaaS Customer Lifetime Value (LTV) Calculator

  1. 1 Enter your Average Revenue per User / Account (ARPU) per month ($).
  2. 2 Set your software or service Gross Margin percentage (%).
  3. 3 Enter your Monthly Churn Rate percentage (%).
  4. 4 Optionally specify your Customer Acquisition Cost (CAC) to evaluate your LTV:CAC ratio and unit economics health.

Methodology & Algorithmic Standards

Calculates Customer Lifespan = 1 / Monthly Churn Rate; LTV = (ARPU × Gross Margin %) / Monthly Churn Rate; LTV:CAC = LTV / CAC. Benchmarked against venture standard 3.0x to 5.0x healthy scaling ratio.

Frequently Asked Questions

What is a healthy LTV to CAC ratio for SaaS companies? ▼

An LTV:CAC ratio between 3.0x and 5.0x is considered the gold standard for sustainable, high-growth SaaS companies. Ratios below 1.0x mean you lose money on every customer acquired.

How does churn rate affect customer lifetime value? ▼

LTV is inversely proportional to churn. Cutting monthly churn in half doubles customer lifespan and doubles total customer lifetime value without increasing acquisition spending.

Should gross margin be included in LTV calculations? ▼

Yes! Realistic LTV must reflect gross margin (gross profit per user), not merely top-line revenue, to account for hosting, payment processing, and support costs.

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