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Lifetime Value (LTV) Calculator

Estimate the total revenue a customer will generate over their relationship with your business. Choose from simple, cohort-based, or discounted cash flow models.

Calculation Model

Calculates LTV from average revenue, gross margin, and churn rate.

Customer Inputs

Percentage of customers lost each month.
Optional. Used for LTV/CAC ratio.
Results update as you type.

How It Works

Simple LTV uses the formula:

LTV = (ARPU × Gross Margin) / Monthly Churn Rate

Cohort-Based LTV projects a starting cohort forward month-by-month, applying churn each period:

Remainingn = Cohort × (1 − Churn Rate)n, then sums contribution per customer across all months.

DCF LTV discounts future cash flows to present value using a discount rate:

LTV = Σ [ (ARPU × Margin × (1 − Churn)n) / (1 + Monthly Discount)n ]

LTV / CAC Ratio indicates whether each customer generates enough value to justify their acquisition cost:

A ratio of ≥ 3.0x is generally considered healthy for sustainable growth.

Key Concepts

Why LTV Matters

  • Determines how much you can spend to acquire customers
  • Helps prioritize high-value customer segments
  • Guides pricing and retention investments
  • Essential for forecasting revenue and growth

Improving LTV

  • Reduce churn through better onboarding and support
  • Increase ARPU with upsells and cross-sells
  • Improve gross margin by optimizing costs
  • Extend customer lifespan with loyalty programs

Embed This Util

You can embed this util on your own site as a widget. Adding ?embed=1 to the URL loads a compact version with just the tool itself; no header, menu, or documentation. Paste this snippet into your HTML: 


    

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