What this calculator does
The ltv calculator (customer lifetime value) on CalcPilot turns a common business & marketing question into an instant answer — no spreadsheets, no sign-up, and no hidden assumptions.
The LTV Calculator tells you how much gross profit an average customer contributes over their lifetime, and whether your CAC is a good bet. It uses the margin-adjusted formula that boards and investors expect.
How to use the LTV Calculator (Customer Lifetime Value)
- Set ARPA — total MRR divided by the customer count.
- Enter your gross margin (revenue minus cost-of-revenue, not operating margin).
- Set monthly churn as a percentage — 3% monthly is roughly 30% annual.
- Add your CAC to see the LTV:CAC ratio and payback period.
The formula
LTV = (ARPA × gross_margin) / monthly_churn
Worked example
$120 ARPA × 78% gross margin / 3% monthly churn = $3,120 LTV. Against $900 CAC → 3.47:1 ratio, 9.6-month payback.
Common mistakes
- Using revenue LTV instead of margin-adjusted (inflates LTV by 20–40%).
- Averaging churn across too small a customer base — cohorts matter.
- Ignoring expansion — net revenue retention >100% dramatically shifts real LTV.
When to use it
Use quarterly to track cohort health, before committing to a new paid channel, or when raising a round.
Pro tips for the LTV Calculator (Customer Lifetime Value)
- Round-trip check: reverse the inputs to confirm the formula matches what you'd compute by hand.
- Bookmark this page: the URL and inputs are all you need to reproduce the exact result later.
- Save your favorite scenarios by clicking the star icon — they're stored locally, no account needed.
Frequently asked questions
›Should I include expansion revenue?
Advanced LTV uses net dollar retention: LTV = ARPA × margin / (churn - expansion_rate). This calculator uses gross churn as a conservative baseline.
›What's a healthy LTV:CAC?
3:1 is the benchmark. Below 1:1 stop paid acquisition. Above 5:1 you may be under-spending on growth.
›Is annual or monthly churn better?
Monthly for high-velocity SMB. Annual for enterprise where contract renewals happen once a year.
›Where does the formula come from?
The formula shown in the "How it works" section is the same one you'll find in standard business & marketing references — no proprietary tweaks or hidden weightings.
›Can I use this on mobile?
Yes — the ltv calculator (customer lifetime value) is fully responsive, and results, charts, and the share button all work on phones and tablets.
Embed this calculator
Drop the LTV Calculator (Customer Lifetime Value) into your own site or blog post. Free to use — a small “Powered by CalcPilot” link is appreciated.
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