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SaaS Lifetime Value (LTV) Calculator

Estimate SaaS customer lifetime value from ARPA, gross margin, churn, and account expansion, including simple LTV and expansion-adjusted LTV.

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Customer LTV
Estimated customer LTV
$4,062.50
Average customer lifetime
25 months
Simple LTV without expansion
$4,062.50
Gross margin
65%
Monthly churn
4%

$250.00 ARPA at 65% margin and 4% monthly churn gives about $4,062.50 LTV.

Average monthly recurring revenue per account.
$
Revenue retained after direct service costs.
%
The percentage of accounts that cancel each month.
%
Expected monthly ARPA increase from upgrades or add-ons.
$

Results update as you type.

Estimate customer value under one retention scenario

Use this tool when you want a contribution-based estimate of the revenue margin associated with an average SaaS account before churn. Enter monthly ARPA in dollars, gross margin and monthly churn as percentages, and an optional fixed dollar increase in ARPA each month. Keep every input on the same monthly basis and use assumptions for one customer segment rather than blending unlike plans.

Method and supported assumptions

This is product-defined arithmetic, not an industry-standard valuation. Let A be ARPA, m gross margin as a decimal, c monthly churn as a decimal, and e monthly account expansion. The assumed lifetime is 1 / c months. Simple LTV is A × m / c. For the expansion view, average lifetime ARPA is A + e × (lifetime - 1) / 2; estimated LTV is that average times lifetime and m.

The model assumes constant churn, margin, and dollar expansion. It does not model cohorts, contraction, acquisition cost, discounting, survival curves, or a maximum customer life.

Worked scenario and comparison

With $250 ARPA, 65% margin, 4% monthly churn, and no expansion, lifetime is 1 / 0.04 = 25 months and LTV is $4,062.50. Holding the first three inputs fixed but adding $10 of monthly expansion raises average lifetime ARPA to $370 and estimated LTV to $6,012.50; simple LTV remains $4,062.50. That gap isolates the effect of the product-defined expansion path rather than proving that expansion will occur.

A churn rate of zero is unsupported because lifetime would be unbounded; the accepted range starts at 0.01%. Negative revenue or expansion, margins outside 0%–100%, blanks, and invalid numeric values are invalid. Very small churn can produce extremely large, fragile estimates.

For a wider operating snapshot, continue with the SaaS metrics calculator. The estimate is limited to the entered assumptions and does not establish future customer behavior; it is not investment or accounting advice.

Frequently asked questions

What does SaaS LTV measure?
SaaS LTV estimates the gross profit a customer account may generate before it churns. This calculator uses monthly ARPA, gross margin, monthly churn, and optional monthly account expansion, so the result is a contribution-based lifetime value rather than a simple top-line revenue total.
How does account expansion change LTV?
Expansion increases the average revenue expected over the customer lifetime. The calculator assumes ARPA grows by the same dollar amount each month, averages the starting and ending revenue path, then applies lifetime months and gross margin to estimate expansion-adjusted LTV.
Should I include services revenue in ARPA?
This calculator uses a house convention in which ARPA contains recurring subscription revenue for the modeled customer segment. If you choose a different revenue scope, label it explicitly and apply it consistently; the calculator does not determine how services revenue should be classified.
What is the difference between simple LTV and estimated LTV?
Simple LTV ignores account expansion and divides monthly gross profit by churn. Estimated LTV is the primary result in this calculator because it can include a monthly ARPA increase from upgrades, more seats, or add-ons before applying the same margin assumption.

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Customer Lifetime Value (CLTV) CalculatorCalculate revenue-based customer lifetime value from total revenue, purchases, customer count, and total customer lifespan.Churn Rate CalculatorCalculate customer churn rate, retention rate, annualized churn, customers remaining, and implied average lifetime for a subscription or recurring customer base.Gross Margin CalculatorCalculate gross profit, gross margin, COGS ratio, and overhead coverage from revenue, cost of goods sold, and optional operating expenses.Margin and Markup CalculatorConvert between cost, revenue, gross margin, and markup using four solve modes, with gross profit and price-to-cost multiple shown together.Profit CalculatorCalculate profit per unit, total profit, revenue, total cost, profit margin, markup, and net selling price after discount.SaaS Metrics CalculatorBuild a SaaS KPI dashboard from MRR, accounts, churn, gross margin, expansion, and CAC, including ARR, ARPA, LTV, payback, NRR, and logo retention.

SaaS Lifetime Value (LTV) Calculator updated at