SaaS LTV Calculator — Customer Lifetime Value
Find out how much gross profit a SaaS customer generates over their full lifetime. Enter your average monthly revenue per user, monthly churn rate, and gross margin to get the adjusted LTV and the cumulative contribution curve.
$/month
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Gross-margin-adjusted total profit per customer
- 1
Monthly churn rate
3% ÷ 100 = 0.03Fraction of customers who cancel each month. - 2
Monthly GM per customer
99 × 75% ÷ 100 = 74.25 - 3
Customer LTV
74.25 ÷ 0.03 = 2,475
How does this calculator work?
LTV = (ARPU × Gross Margin%) / Monthly Churn Rate. A $99/month product with 3% monthly churn and 75% gross margin yields an LTV ≈ $2,475. Enter your numbers to see the gross-margin-adjusted LTV and the cumulative contribution curve over the customer lifetime.
Formula
How this is calculated
Customer Lifetime Value (LTV) is the total gross profit a SaaS business can expect from a single customer. The revenue-only LTV is simply ARPU ÷ monthly churn rate — for a $99/month product with 3% monthly churn that is $3,300. The preferred gross-margin-adjusted formula multiplies by the gross margin percentage first, yielding (ARPU × GM%) ÷ churn, because it measures profit, not just revenue, after paying for servers, support and other direct costs.
Monthly churn of 3% implies an average customer lifetime of 1 ÷ 0.03 ≈ 33 months. Halving churn to 1.5% doubles the LTV without touching ARPU — which is why retention is often the highest-leverage improvement in subscription businesses. The cumulative curve shows how gross-margin dollars accumulate from a single cohort as months pass and some customers inevitably cancel.
This calculator uses the undiscounted LTV formula. A more rigorous version discounts future cash flows by a cost of capital (typically 8–15% annually). For early-stage companies with fast-moving metrics, the undiscounted figure is the industry standard. LTV should be compared against the Customer Acquisition Cost (CAC); a healthy SaaS business targets LTV ≥ 3× CAC.
Frequently asked questions
Most benchmarks target LTV:CAC ≥ 3:1 — meaning a customer should return at least three times what it cost to acquire them. Below 3:1 the business is likely overspending on sales and marketing relative to the value customers generate.
Gross margin converts revenue-based LTV into profit-based LTV. At 75% gross margin, only ¾ of each dollar of ARPU is profit. High-margin SaaS (70–85%) has far better unit economics than lower-margin businesses at the same ARPU and churn.
B2B SaaS companies typically target 1–3% monthly churn (≈12–32% annualised). Consumer SaaS often runs 3–8%. Below 1% monthly is excellent; above 5% signals serious retention problems that erode LTV rapidly.
Also known as
TG we-Calculate Editorial Team. (2026). SaaS LTV Calculator — Customer Lifetime Value [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/saas-ltv-calculator
TG we-Calculate Editorial Team. "SaaS LTV Calculator — Customer Lifetime Value." TG we-Calculate. 2026. https://we-calculate.com/calculator/saas-ltv-calculator.
TG we-Calculate Editorial Team, "SaaS LTV Calculator — Customer Lifetime Value," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/saas-ltv-calculator
@misc{wecalculate_saas_ltv_calculator, title = {SaaS LTV Calculator — Customer Lifetime Value}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/saas-ltv-calculator}}, year = {2026}, note = {TG we-Calculate} }
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