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Customer lifetime value (LTV) calculator

Customer lifetime value is the gross profit a customer brings in before they leave: average monthly revenue per customer × gross margin ÷ monthly churn. Enter those three, and what it costs to win a customer, to see LTV and the LTV-to-CAC ratio.

Only changes how amounts are shown.

Monthly recurring revenue ÷ paying customers. For annual plans, divide the yearly price by 12.

%

Revenue minus the cost of serving customers (hosting, support, payment fees), as a share of revenue.

Annual churn is converted to the monthly rate that compounds to it.

%

Customers lost in the period ÷ customers at its start.

months

Optional. Leave empty to skip the capped figure.

Optional. Sales and marketing spend ÷ new customers won with it. Leave empty to skip the LTV:CAC ratio.

Customer lifetime value (LTV)

₹53,333

₹1,600 gross profit a month ÷ 3% monthly churn

Gross profit per customer a month
₹1,600ARPA × gross margin: ₹2,000 × 80%.
Average customer lifetime
33.3 months (2.8 years)1 ÷ 3% monthly churn, if the rate holds.
LTV over the first 36 months
₹35,51966.6% of the simple LTV; the rest comes after month 36.
LTV:CAC ratio
4.44 : 1₹53,333 ÷ ₹12,000 CAC.
LTV:CAC over 36 months
2.96 : 1₹35,519 ÷ ₹12,000 CAC.
LTV minus CAC
₹41,333Gross profit a customer brings in after paying back what it cost to win them.
  • The simple formula counts every month a customer might stay. At 3% monthly churn, 66.6% of it arrives in the first 36 months; the lower the churn, the more of the LTV depends on customers staying for years.
  • Assumes revenue per customer, gross margin and churn stay the same every month, with no upgrades or price changes and no discount for money that arrives later.

How is customer lifetime value calculated?

Customer lifetime value (LTV) is the gross profit an average customer brings in before they leave. Gross profit per customer a month is average monthly revenue per customer (ARPA) times gross margin; divide it by monthly churn to get LTV. ₹2,000 a month at an 80% margin is ₹1,600 of gross profit, and at 3% monthly churn that is ₹1,600 ÷ 0.03 = ₹53,333.

Dividing by churn is the same as multiplying by the average customer lifetime, 1 ÷ churn: 3% a month means about 33.3 months. If you know annual churn instead, the calculator converts it to the monthly rate that compounds to it, 1 − (1 − annual)^(1/12), so 30% a year becomes 2.93% a month rather than 2.5%.

The simple formula adds up every month a customer might stay, however far away. The capped figure adds only the first months you choose, each weighted by the share of customers still there: (1 − churn)^(month − 1). At 3% churn, 66.6% of the simple LTV arrives in the first 36 months; at 1% churn only 30.4% does, so a low churn rate makes the simple LTV lean on customers staying for many years.

With a customer acquisition cost (CAC), the LTV:CAC ratio is LTV ÷ CAC: how many times over a customer's gross profit repays what it cost to win them. The calculator shows the ratio for the simple and the capped LTV and does not set a target.

gross profit a month = ARPA × gross margin
LTV = gross profit a month ÷ monthly churn
average lifetime = 1 ÷ monthly churn
monthly churn = 1 − (1 − annual churn)^(1/12)
LTV over H months = Σ (t = 1 … H) gross profit × (1 − churn)^(t − 1)
LTV:CAC = LTV ÷ CAC

How much does churn change customer lifetime value?

LTV at ₹1,000 ARPA and 80% gross margin (₹800 gross profit a month), by monthly churn
Monthly churnAverage lifetimeSimple LTVLTV over 36 monthsShare of LTV in 36 months
1%100.0 months₹80,000₹24,28730.4%
2%50.0 months₹40,000₹20,67151.7%
3%33.3 months₹26,667₹17,75966.6%
5%20.0 months₹16,000₹13,47684.2%
7%14.3 months₹11,429₹10,59092.7%
10%10.0 months₹8,000₹7,82097.7%

How to calculate customer lifetime value

  1. 1
    Enter revenue and marginType the average monthly revenue per paying customer and your gross margin after hosting, support and payment costs.
  2. 2
    Enter churnChoose whether you know monthly or annual customer churn and type the rate. Annual churn is converted to its monthly equivalent.
  3. 3
    Add CAC and a horizonOptionally, add what it costs to win a customer for the LTV:CAC ratio, and the number of months for the capped LTV.
  4. 4
    Read the resultsThe result shows LTV, the average lifetime, the LTV earned within your horizon, and the LTV:CAC ratio for both.

Frequently asked questions

Should LTV use revenue or gross profit?
Gross profit, if you want to compare it with what a customer costs to win. Revenue-based LTV leaves out hosting, support and payment costs, so it overstates what a customer is worth: at an 80% margin it is 25% higher than the gross-profit figure.
Why does a small change in churn change LTV so much?
Because LTV divides by churn. Halving churn from 4% to 2% a month doubles the average lifetime from 25 to 50 months, and so doubles LTV, even though revenue and margin are unchanged.
What does the LTV to CAC ratio tell you?
How many times a customer's gross profit covers what it cost to win them. 1 : 1 means the gross profit only just repays acquisition; below 1 : 1 each new customer loses money at these numbers. This calculator shows the ratio and leaves the target to you, because it depends on your market, cash and growth plans.
How do I calculate LTV from annual churn?
Convert annual churn to monthly first: monthly = 1 − (1 − annual)^(1/12). 30% annual churn is 2.93% a month, not 30 ÷ 12 = 2.5%. Then divide monthly gross profit per customer by that rate, or choose annual churn in the calculator and it converts for you.
Why cap LTV at 36 months?
The simple formula assumes customers keep paying for as long as churn allows, which can mean decades at low churn. Counting only the first 36 months shows how much value arrives within a horizon you can plan for; at 1% monthly churn that is about 30% of the simple LTV.

Built and maintained by CountryDevs. Updated October 2026. Runs in your browser; what you type is not sent to us.

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