Customer Lifetime Value (LTV) Calculator
Enter ARPU, margin, and churn to see lifetime value, how it compares to your acquisition cost, and how the value of a customer accumulates over the first year.
Your numbers
Results update live
Lifetime value
$1,600
Avg lifetime 20.0 months
LTV:CAC ratio
8.0:1
3:1 or better is the common target
Cumulative value, months 1 to 12
Our Pick
HubSpot Marketing Analytics
Track LTV and CAC by cohort automatically instead of rebuilding this in a spreadsheet each quarter.
How this is calculated
- Average lifetime (months) = 100 / monthly churn percent.
- LTV = ARPU x gross margin x average lifetime.
- LTV:CAC = LTV / CAC, shown only when you enter a CAC.
- The value curve sums ARPU x margin x retained share each month, where retained share decays by churn.
This is a simplified constant-churn model, which real cohorts rarely follow, so use it to compare scenarios rather than to forecast to the dollar. For the full acquisition picture, the marketing ROI calculator ties LTV back to CAC and payback.
Frequently asked questions
How is customer lifetime estimated?
Average lifetime in months is 1 divided by your monthly churn rate. At 5 percent monthly churn the average customer stays about 20 months. It ignores cohort effects, so treat it as a planning figure.
Should LTV use revenue or margin?
Margin. Revenue-based LTV overstates what a customer is worth because it ignores the cost of serving them. This calculator multiplies ARPU by your gross margin so the number reflects contribution, not top line.
What is a healthy LTV:CAC ratio?
Most operators aim for 3:1 or better. Below 1:1 you lose money on every customer. Far above 5:1 often means you are underinvesting in acquisition.