SaaS LTV Calculator
Calculate Customer Lifetime Value for your SaaS business using ARPA, churn rate, and expansion metrics
Calculate SaaS Customer Lifetime Value
Monthly revenue per customer
Profit percentage after direct costs
Percentage of customers who cancel monthly
Additional monthly revenue growth per customer
SaaS LTV Results
Enter your SaaS metrics to calculate customer lifetime value
Example Calculation
SaaS Company Example
ARPA: $150/month
Monthly Churn Rate: 3%
Gross Margin: 85%
Account Expansion: $10/month
LTV Calculation
Lifetime = 1/0.03 = 33.3 months
LTV = [0.5 × 33.3 × (2 × 150 + 10 × 32.3)] × 0.85
LTV = [0.5 × 33.3 × 623] × 0.85
LTV = $8,815
Key SaaS Metrics
ARPA
Average Revenue Per Account
Monthly recurring revenue per customer
Churn Rate
Customer cancellation rate
Percentage lost each month
Expansion
Account growth revenue
Upsells and cross-sells
LTV Benchmarks
Excellent: LTV ≥ 36x ARPA
Good: LTV = 12-36x ARPA
Fair: LTV = 6-12x ARPA
Poor: LTV < 6x ARPA
Understanding SaaS Customer Lifetime Value
What is SaaS LTV?
Customer Lifetime Value (LTV) represents the total net profit a SaaS business can expect from a customer throughout their entire relationship. It's a critical metric for understanding customer value and optimizing business strategies.
Why is LTV Important?
- •Determines maximum customer acquisition cost (CAC)
- •Guides pricing and product strategy
- •Helps evaluate business model sustainability
- •Supports investment and growth decisions
LTV Formula Explanation
LTV = [0.5 × 1/churn × (2 × ARPA + expansion × (1/churn - 1))] × margin
- LTV: Customer Lifetime Value ($)
- ARPA: Average Revenue Per Account ($/month)
- Churn: Monthly churn rate (decimal)
- Expansion: Monthly account expansion ($)
- Margin: Gross margin (decimal)
Note: This formula accounts for both customer lifetime and expansion revenue, providing a more accurate LTV calculation than simple ARPA/churn methods.