Customer Lifetime Value (LTV) Calculator
Customer lifetime value from monthly revenue, gross margin and churn — textbook and with expansion and discounting — with cumulative value and LTV:CAC.
The contribution a customer is expected to bring over their life, how that figure changes with discounting and expansion, how much of it arrives in the first years, and how it compares with your acquisition cost.
Example: ARPU 50, margin 70 % and 3 % monthly churn give 35 a month for 33 months: LTV 1,166.67. With 1 % expansion and a 10 % discount rate, 1,247.75; a CAC of 400 gives LTV:CAC 2.9.
A customer,
summed over time.
The textbook formula, the two adjustments that make it honest, and why the cumulative table matters more than the headline.
The simple figure
Each month a customer contributes ARPU × gross margin. With a constant monthly churn c, the chance of still being a customer after t months is (1 − c)ᵗ, the expected lifetime is 1/c months, and the expected total contribution is the geometric sum m/c. That is the figure most SaaS decks quote; it treats revenue ten years out as worth as much as revenue next month, and it assumes churn never changes.
Expansion and discounting
If retained customers grow their spend by g per month, and money next year is worth less than money now at an annual rate you choose, each month's contribution is multiplied by q = (1 − c)(1 + g)/(1 + d) with d the monthly equivalent of the annual rate. The lifetime value becomes m/(1 − q) — the Gupta–Lehmann form — and the cumulative value after n months is m(1 − qⁿ)/(1 − q). If expansion outpaces churn and discounting (q ≥ 1) the sum diverges and the page says so rather than printing a number.
Reading it
LTV:CAC divides the lifetime figure by what a customer cost to acquire; payback is CAC ÷ monthly contribution. Both lean on the churn rate you enter — at 1 % monthly churn the model credits 100 months of revenue, most of it unobserved — so the 36- and 60-month cumulative figures are usually the ones to plan on. Nothing here is a valuation, a forecast or advice. Nothing leaves the browser; the same four anonymous usage counts as the rest of the site apply.
SOURCES
- Gupta, S., Lehmann, D. R. & Stuart, J. A. (2004). Valuing customers. Journal of Marketing Research 41(1), 7–18 — the margin ÷ (1 − retention/(1 + discount)) lifetime-value form
Last reviewed 19 September 2026. How results are checked: How we verify.