LTV Calculator for SaaS

Calculate Customer Lifetime Value and payback period for your SaaS

Average Revenue Per User (ARPU)

$/mo

Monthly Churn5%

Gross Margin80%

CAC

Lifetime Value Analysis

Customer LTV

$980

20 months avg lifetime

Gross LTV

$784

After 80% margin

Payback Period

5.1 months

To recover CAC

LTV:CAC Ratio

3.9:1

Excellent

Annual Revenue / Customer

$588

Per year

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LTV Calculation

Calculate customer lifetime value based on ARPU and churn rate using the standard SaaS formula.

Payback Period

See how long it takes to recover your customer acquisition cost from each customer.

LTV:CAC Ratio

The gold standard metric for SaaS unit economics. Aim for 3:1 or higher.

Gross Margin Adjusted

Get LTV adjusted for your gross margin to see true profitability per customer.

About This Calculator

Customer Lifetime Value (LTV or CLV) measures the total revenue a SaaS business can expect from a single customer over the entire duration of their subscription. It is one of the most critical SaaS metrics because it determines how much you can afford to spend on acquisition, which customer segments are most profitable, and whether your business model is sustainable. This calculator uses your Average Revenue Per User (ARPU) and churn rate to compute LTV, expected customer lifespan, and payback period.

How to Use

Enter your Average Revenue Per User (ARPU) per month -- this is your MRR divided by total active customers.

Input your monthly customer churn rate as a percentage.

Review the calculated LTV, average customer lifespan in months, and the resulting LTV:CAC ratio if you provide your Customer Acquisition Cost.

Frequently Asked Questions

How is SaaS LTV calculated?

The simplest formula is LTV = ARPU / Monthly Churn Rate. For example, if your ARPU is $50/month and your monthly churn is 5%, then LTV = $50 / 0.05 = $1,000. More advanced models apply a gross margin adjustment (LTV = ARPU x Gross Margin / Churn) to reflect actual profit per customer.

What is a good LTV for a SaaS business?

There is no universal benchmark because LTV varies by market segment. However, a healthy SaaS business typically has an LTV that is at least 3 times its Customer Acquisition Cost (CAC). Enterprise SaaS products often have LTVs of $50,000 or more, while SMB-focused tools may range from $500 to $5,000.

How can I increase my LTV?

The two main levers are reducing churn and increasing ARPU. Reducing churn extends the average customer lifespan, which directly multiplies LTV. Increasing ARPU through upsells, cross-sells, usage-based pricing tiers, or annual plan discounts raises the revenue you earn each month. Even small improvements in either metric compound significantly over time.