Customer Lifetime Value (LTV) Calculator
Calculate customer lifetime value from monthly revenue per customer, gross margin and churn, plus LTV:CAC ratio and CAC payback months. Free, no signup.
Customer lifetime value (LTV) is the gross profit you earn from a customer before they leave: monthly revenue per customer x gross margin / monthly churn. A $50/month customer at 80% margin and 4% monthly churn is worth $1,000. Compare it with what you spend to acquire one - 3:1 or better is healthy.
Runs entirely in your browser · no signup · nothing is uploaded · updated 2026-10-29
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How to use it
- 1.Enter average monthly revenue per customer (ARPA).
- 2.Enter gross margin and monthly churn rate.
- 3.Add customer acquisition cost to see LTV:CAC and how many months it takes to earn CAC back.
LTV formulas
Use gross margin, not revenue - LTV on revenue overstates what a customer is worth.
| Metric | Formula | Worked example |
|---|---|---|
| LTV | ARPA x gross margin / monthly churn | $50 x 0.8 / 0.04 = $1,000 |
| Average lifetime | 1 / monthly churn | 1 / 0.04 = 25 months |
| LTV : CAC | LTV / CAC | $1,000 / $300 = 3.3 : 1 |
| CAC payback | CAC / (ARPA x gross margin) | $300 / $40 = 7.5 months |
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<iframe src="https://rankcert.com/embed/ltv-calculator" title="LTV Calculator" width="100%" height="600" style="border:0;border-radius:12px" loading="lazy"></iframe> <p style="font-size:13px">Free <a href="https://rankcert.com/tools/ltv-calculator">ltv calculator</a> by RankCert</p>
Frequently asked questions
What is a good LTV to CAC ratio?
3:1 is the usual benchmark. Below 1:1 you lose money on every customer; well above 5:1 often means you are underinvesting in growth and could spend more to acquire customers.
What is a good CAC payback period?
Under 12 months is healthy for most SaaS businesses, and under 6 is strong. Long payback periods tie up cash, which shortens runway even when LTV looks good.
Why use gross margin in LTV?
Because revenue is not profit. Hosting, payment fees and support all scale with customers; LTV on gross profit tells you what a customer is actually worth to the business.
How do I calculate LTV with no churn data?
Use a conservative estimate. Early SaaS products often see 3 to 8 percent monthly churn for small business customers. Re-run the numbers once you have three months of real data.
Is LTV the same as CLV?
Yes. LTV, CLV and CLTV all mean customer lifetime value. The formula here is the standard SaaS version, built on monthly churn.
Why does a small change in churn change LTV so much?
Lifetime is 1 divided by churn, so halving churn from 4% to 2% doubles average lifetime from 25 to 50 months - and doubles LTV with it.
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