# LTV Calculator

> LTV: LTV = ARPU × gross margin ÷ churn rate (margin-adjusted). Methodology stated, your own inputs only.

Page: https://freecalculator.tech/tools/ltv-calculator
Last reviewed: 2026-10-15

## Formula

LTV = ARPU × gross margin ÷ churn rate (margin-adjusted). Revenue LTV = ARPU ÷ churn.

- Methodology: simple constant-churn LTV, undiscounted; the margin-adjusted figure is the headline and the revenue-only version is shown separately.
- Expected lifetime = 1 ÷ churn (geometric model).
- No standards body defines LTV; churn and margin are your own figures.
- LTV = ARPU × gross margin ÷ churn rate (margin-adjusted). Revenue LTV = ARPU ÷ churn.
- Inputs used: Currency (symbol only, never converted), Average revenue per customer per month, Gross margin (your figure), Monthly customer churn (your measured rate).

## Inputs

- Currency (symbol only, never converted)
- Average revenue per customer per month
- Gross margin (your figure)
- Monthly customer churn (your measured rate)

## Worked example: A subscription

$80 a month, 75% margin, 2.5% monthly churn.
1. Lifetime = 40 months.
2. 80 × 40 = $3,200 revenue.
3. × 75% = $2,400.

## Common questions

### Why margin-adjusted?

Revenue overstates value; gross profit is what remains to pay back acquisition. Check the formula, example, and limitations on this page before using the result for a real customer economics decision.

### What if churn is zero?

The simple model breaks down — lifetime becomes infinite. Use a capped lifetime instead.

### What is a good value?

We don't assume an industry-standard figure. Compare against your own history and plan, not a rule of thumb.

### How do I use the LTV Calculator?

Enter the required values for Currency (symbol only, never converted), Average revenue per customer per month, Gross margin (your figure), Monthly customer churn (your measured rate). The calculator applies the formula on this page and shows the main result with any supporting breakdown so you can check the arithmetic.

### What formula does the LTV Calculator use?

LTV = ARPU × gross margin ÷ churn rate (margin-adjusted). Revenue LTV = ARPU ÷ churn. The visible formula section above lists the calculation path and the edge cases the page handles, so the result can be checked without relying on the form alone.

### Can the LTV Calculator be used for exact decisions?

Use it as a calculation aid, not as a substitute for checking the underlying rule, contract, policy, or professional advice that applies to your situation. When a result depends on local rules, personal details, prices, or dates, enter those values yourself and confirm them before acting.

## Limitations and assumptions

- Constant churn and ARPU.
- Undiscounted; no expansion.
- Results are educational estimates built only from the figures you enter. They are not personalised investment, tax, legal or accounting advice. Rates, growth and discount assumptions are always yours to choose.
- The result depends on the values you enter for this ltv calculator; it does not supply missing rates, rules, prices, dates, or assumptions for you.

## Sources

- OpenStax — https://openstax.org/books/principles-marketing/pages/1-unit-introduction

## Cite this page

- APA: Free Calculator. (2026, October 15). LTV Calculator. https://freecalculator.tech/tools/ltv-calculator
- MLA: "LTV Calculator." Free Calculator, 15 Oct. 2026, https://freecalculator.tech/tools/ltv-calculator.
- Link: LTV Calculator — Free Calculator, https://freecalculator.tech/tools/ltv-calculator