LTV Calculator
LTV: LTV = ARPU × gross margin ÷ churn rate (margin-adjusted). Methodology stated, your own inputs only.
In short
LTV: LTV = ARPU × gross margin ÷ churn rate (margin-adjusted). Methodology stated, your own inputs only.
Formula: LTV = ARPU × gross margin ÷ churn rate (margin-adjusted). Revenue LTV = ARPU ÷ churn.
What this calculator does
LTV: LTV = ARPU × gross margin ÷ churn rate (margin-adjusted). Methodology stated, your own inputs only. Worked example, questions and limitations included.
Use it to turn Currency (symbol only, never converted), Average revenue per customer per month, Gross margin (your figure), Monthly customer churn (your measured rate) into a checked result you can compare, copy, or rerun with different assumptions.
The page shows the formula, a numeric worked example, and the assumptions that affect this customer economics calculation.
Inputs and what they mean
- Currency (symbol only, never converted)
- — choice value.
- Average revenue per customer per month
- — number value.
- Gross margin (your figure)
- — number value.
- Monthly customer churn (your measured rate)
- — number value.
How to use it
- Enter each value in the unit shown next to the box (use the unit converter first if your numbers are in other units).
- Check the breakdown to see every intermediate step.
- Read the limitations before relying on the result.
Formula
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).
Worked example
A subscription
- Lifetime = 40 months.
- 80 × 40 = $3,200 revenue.
- × 75% = $2,400.
Reading the result
The headline figure is the main answer. Any breakdown underneath shows the parts that make it up, so you can check the working and see what changes when you adjust an input.
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.
Reference: OpenStax
Last reviewed:
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.
Sources
Method based on OpenStax.
Cite this page
Free Calculator. (2026, October 15). LTV Calculator. https://freecalculator.tech/tools/ltv-calculator
"LTV Calculator." Free Calculator, 15 Oct. 2026, https://freecalculator.tech/tools/ltv-calculator.
LTV Calculator — Free Calculator, https://freecalculator.tech/tools/ltv-calculator
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CAC: CAC = acquisition spend ÷ new customers acquired, for the same period. Methodology stated, your own inputs only.
LTV:CAC Ratio: LTV:CAC = LTV ÷ CAC. Methodology stated, your own inputs only.
CAC Payback: Payback months = CAC ÷ (monthly revenue per customer × gross margin). Methodology stated, your own inputs only.
Gross Revenue Retention: GRR = (starting recurring revenue − contraction − churn) ÷ starting recurring revenue × 100. Methodology stated, your own inputs only.
Net Revenue Retention: NRR = (starting recurring revenue + expansion − contraction − churn) ÷ starting recurring revenue × 100. Methodology stated, your own inputs only.
Churn Rate: Customer churn = customers lost ÷ customers at start × 100. Methodology stated, your own inputs only.