LTV Calculator

LTV estimates what a customer is worth over the whole relationship. The raw version uses revenue; the margin-adjusted version uses gross profit, which is the number that should actually be compared to CAC.

Inputs

Average revenue per customer / period

Average customer lifespan (periods)

In months if ARPU is monthly.

Gross margin

Results

LTV (revenue)

$882.00

LTV (margin-adjusted): $617.40
Total gross profit per customer: $617.40

Use margin-adjusted LTV for CAC comparisons — comparing CAC to revenue-based LTV systematically overstates how much you can pay for growth.

Formula

LTV = ARPU × Lifespan · Adjusted LTV = LTV × Gross Margin

FAQ

How do I estimate lifespan?

If you know monthly churn rate c, expected lifespan ≈ 1 ÷ c. With 4% monthly churn, that's about 25 months.

Should LTV be discounted?

For long lifespans and real investment decisions, yes — future money is worth less. For quick operational guidance, undiscounted is the common convention.