LTV calculator
Customer lifetime value from lifetime or churn.
Fill in the fields and the result will appear here automatically.
This estimate uses constant monthly revenue per customer and a gross margin. Average lifetime is supplied in months or derived from a constant monthly probability of customer churn. The value is before CAC and any overhead excluded from the supplied margin; it is not net customer profit. Changing prices, churn or cohort-age revenue require a separate monthly cash-flow model.
How it works
Formula and logic
LTV = monthly revenue A × average lifetime L × margin share m. With constant monthly customer churn c: L = 1/c. The geometric model includes the first paid month: L = 1 + (1−c) + (1−c)² + … . For CAC > 0, ratio = LTV/CAC and simple coverage time = CAC/(A × m). This time excludes churn before coverage, discounting and payment dates. Intermediate figures remain unrounded; ordinary amounts and months use two decimal places.
Example
Monthly revenue 800 monetary units, churn 12% and margin 70% give lifetime 8.3333… months and LTV 4,666.67. CAC 2,800 gives ratio 1.67× and simple coverage time 5.00 months. At 100% churn the first paid month remains: revenue 500 and margin 100% give LTV 500. Zero churn has no finite lifetime under this model.
Fields and units
- How to derive lifetime — list option
- Monthly revenue per customer — $
- Lifetime, months — months
- Monthly customer churn, % — unitless
- Gross margin, % — unitless
- Acquisition cost — $
How to use
- — Choose known average lifetime or monthly churn; the other mode’s field is ignored.
- — Enter positive monthly revenue per customer and margin above 0 up to 100%. Lifetime can be a fractional average.
- — Use monthly customer churn, not annual churn or revenue churn, in the churn mode.
- — CAC is optional: blank or 0 omits the ratio and simple coverage time. Keep all money in one currency; no exchange occurs.
Method and limitations
- Calculation method
- Formula and logic
- Data or methodology source
- Stripe Atlas: constant monthly churn and geometric customer lifetime
- Limitation
- Constant monthly model without discounting. LTV is before CAC and other costs excluded from the margin. The ratio has no universal rating and simple coverage time does not guarantee payback.
FAQ
Why does complete monthly churn still leave one month?
The customer has paid for the first month and leaves before the next one with probability 100%. This sum starts with that first paid period, rather than after it.
What remains excluded after applying the gross margin?
CAC, overhead excluded from the supplied margin and time value. The margin removes only the costs belonging to its defined basis. The resulting LTV is not automatically net customer profit.
Can annual churn be entered as monthly churn?
No. The periods must match. Under a constant probability of departure, annual churn 12% corresponds to monthly churn 1 − 0.88^(1/12), rather than 12% or simply 1%. Revenue churn is also a different measure.
Why does zero churn need a different lifetime model?
Without departures, an endless sum of positive constant monthly revenue has no finite lifetime. Supply a justified lifetime or use a separate bounded horizon; no automatic sixty-month fallback is applied.
Does the simple CAC coverage time guarantee payback?
No. It divides CAC by constant monthly margin-adjusted revenue without reducing the surviving customer count. Expected cohort coverage requires survival, receipt timing and other costs.