Profit Geeks

Free LTV calculator · No signup

LTV Calculator.

Customer Lifetime Value, calculated honestly. Enter average monthly revenue, gross margin, and monthly churn. Returns LTV, expected lifetime in months, and the LTV:CAC ratio your unit economics actually hit.

$

Total recurring revenue ÷ paying customers. Use AOV for non-recurring businesses.

%

Revenue minus cost of goods, divided by revenue.

%

Net cancellation rate per month. SaaS healthy is under 3 percent. Ecommerce is repeat-purchase rate inverse.

$

From the CAC calculator or your own number.

Result

Customer Lifetime Value (LTV)

$7,000

Expected lifetime

33 months

Monthly contribution per customer

$210

Annual revenue per customer

$3,600

LTV : CAC ratio

4.67x

Profit per customer (LTV − CAC)

$5,500

Reading the verdict

An LTV:CAC of 4.67x is in the healthy band (3x to 5x). Capable of funding measured spend increases.

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How LTV is calculated

The simple formula.

LTV = (ARPU × gross margin) ÷ monthly churn. The calculator uses this version because it is defensible to a finance audience and does not require a discount-rate assumption.

Discounted-cash-flow LTV is more accurate but harder to explain. For day-to-day spend decisions, the simple version is what most CFOs want to see.

LTV:CAC bands.

Below 3x is thin. 3x to 5x is healthy. Above 5x is strong, but often signals you are under-spending: the channel could support more, you are leaving growth on the table.

Frequently asked

Five questions about LTV.

How is Customer Lifetime Value (LTV) calculated?

The simple formula is (ARPU × gross margin) ÷ monthly churn. ARPU is average revenue per customer per month, gross margin is revenue minus cost of goods divided by revenue, and monthly churn is the rate of paying customers cancelling each month. The calculator on this page does the maths and returns expected lifetime in months alongside.

What is a good LTV:CAC ratio?

Below 3x is thin. 3x to 5x is healthy. Above 5x is strong, but often signals under-spending: the channel could support more spend without breaking the economics. The calculator returns this ratio directly.

Should I use the simple LTV formula or discounted cash flow?

For day-to-day spend decisions, the simple formula is what most CFOs and operators want to see. Discounted cash flow LTV is more accurate but introduces a discount-rate assumption that is hard to defend without a finance team in the loop.

Why does my LTV swing wildly month to month?

Almost always because monthly churn is being measured on too small a sample. Use a six-month rolling churn rate to smooth out the noise. The calculator works with a single churn input, so plug in the rolling rate.

Does LTV apply to non-recurring ecommerce businesses?

Yes. Substitute average order value for ARPU and use 1 ÷ repeat-purchase rate as your effective monthly churn. The result is the contribution per customer over their expected purchase cycle.