SaaS

LTV Calculator

Estimate customer lifetime value from ARPA, gross margin, and churn rate.

Last reviewed: April 30, 2026Free toolMethodology

LTV Calculator

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These fields start with sample inputs. Keep them or replace them, then run the tool to show a fresh result.

Number fields accept plain values and common formatted input such as 250000, 250,000, or 1,234.56.

Result

Calculating the sample result.

Why it matters

LTV turns monetization and retention into a single number that helps teams judge acquisition efficiency and business quality.

When to use

  • Comparing plans or segments
  • Benchmarking acquisition efficiency
  • Testing the impact of churn improvements

Inputs & Outputs

Inputs

  • ARPA is the average recurring revenue per account for the same unit you want to value.
  • Gross margin adjusts revenue down to the portion that contributes to covering operating costs and profit.
  • Churn rate should match the same period cadence as ARPA.

Outputs

  • LTV shows the estimated gross-margin-adjusted value of a customer account over its expected life.
  • Estimated customer lifetime converts churn into an average account lifespan.

Simplified SaaS LTV model

Divide gross-margin-adjusted ARPA by churn rate. This common shortcut assumes a steady-state SaaS business and constant churn.

LTV = (ARPA x gross margin) / churn rate

Worked example

1

Unit economics check

ARPA is 420, gross margin is 82%, and monthly churn is 2.5%.

Inputs

  • ARPA: 420
  • Gross margin: 82%
  • Monthly churn: 2.5%

Steps

  • Gross-margin ARPA = 420 x 82% = 344.4
  • LTV = 344.4 / 0.025 = 13,776

Result

  • Estimated lifetime value is 13,776 per account under this simplified model.

Edge cases & caveats

  • This is a shortcut, not a cohort-level cash flow model.
  • The result is very sensitive to churn assumptions, especially at low churn rates.

Frequently Asked Questions

Should I use logo churn or revenue churn?

For account-level LTV, logo churn paired with ARPA is common. Use a consistent framework when comparing over time.

Why include gross margin in LTV?

Because recurring revenue is not the same as value retained after direct delivery costs.

Keep going

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