SaaS Metrics
Customer LTV Calculator
Estimate customer lifetime value from ARPU, gross margin, and monthly churn rate.
What this calculator does
Estimate simplified subscription customer lifetime value from monthly ARPU, gross margin, and monthly customer churn.
Scope, period, and currency
This page runs a local formula from user-entered values. The country/currency selector changes money symbols and formatting only: it does not perform live or historical FX conversion or automatically change contract, tax, accounting, or regulatory rules. Convert all amounts into one currency first and keep periods and metric definitions consistent.
Formula variables
- A
- Monthly ARPU or ARPA.
- g
- Gross margin as a decimal.
- c
- Monthly customer churn as a decimal.
Formula and worked example
Formula: LTV = A × g ÷ c; expected lifetime under constant geometric churn = 1 ÷ c months.
Recalculation: $39 monthly ARPU × 82% gross margin ÷ 4.5% monthly churn = $710.67 LTV; modeled lifetime = 22.22 months.
Model assumptions
- ARPU, gross margin, and churn remain stable.
- Churn is monthly logo/customer churn, not revenue churn.
- The model excludes expansion, contraction, discounting, cohorts, and acquisition cost.
Reading the result and model boundary
- Small churn changes can move LTV sharply, especially with limited data.
- Use cohort and rolling-period checks before treating the estimate as a business value.
This is a steady-state unit-economics approximation, not a discounted cohort valuation.
How to use it
- Normalize revenue to monthly ARPU.
- Use gross margin and churn from the same customer population and period.
- Compare the simple estimate with cohort retention.
Common incorrect uses
- Combining annual ARPU with monthly churn.
- Using revenue churn in a customer-churn formula.
- Assuming 1 ÷ churn is an observed customer lifetime.
Suggested verification workflow
- Align units and cohort definitions.
- Calculate simple LTV.
- Stress-test churn and compare with observed cohorts.
FAQ
Must ARPU be monthly?
Yes. It must use the same monthly period as the churn input.
Is 1 ÷ churn an observed lifetime?
No. It is an expectation under a constant geometric churn assumption.
Does currency selection perform FX conversion?
No. It changes formatting only; use one currency for ARPU and comparisons.
Method and review boundary
Results are calculated locally in the browser from the formula shown on this page. The tool does not retrieve live rates, quotes, approvals, or billing data. Last reviewed: July 24, 2026.
Use the result for first-pass estimates, scenario comparison, and question preparation; it is not financial, investment, tax, accounting, or legal advice.
Authoritative sources and notes
- SaaS customer lifetime value - ChartMogul
- ChartMogul LTV report methodology - ChartMogul
- Gross churn measurement - Stripe
Sources checked July 24, 2026. Rates, product rules, and official guidance can change; verify them again before a formal decision.