{
  "slug": "ltv",
  "title": "Customer Lifetime Value Calculator",
  "heading": "Customer Lifetime Value Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/ltv",
  "summary": "LTV, LTV:CAC ratio, and average customer lifespan.",
  "description": "LTV is gross-margin dollars, not revenue — counting revenue inflates it by whatever your delivery costs are. Healthy subscription businesses run an LTV:CAC of 3 or better.",
  "formula": "Lifespan = 1 ÷ Monthly churn. LTV = ARPU × Gross margin × Lifespan.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=ltv",
  "inputs": [
    {
      "id": "arpu",
      "label": "Average revenue per user",
      "kind": "number",
      "hint": null,
      "default": 89,
      "unit": "$/mo",
      "min": 0,
      "max": null
    },
    {
      "id": "margin",
      "label": "Gross margin",
      "kind": "number",
      "hint": null,
      "default": 78,
      "unit": "%",
      "min": 0,
      "max": 100
    },
    {
      "id": "churn",
      "label": "Monthly churn rate",
      "kind": "number",
      "hint": null,
      "default": 3.5,
      "unit": "%",
      "min": 0.01,
      "max": 100
    },
    {
      "id": "cac",
      "label": "CAC",
      "kind": "number",
      "hint": null,
      "default": 620,
      "unit": "$",
      "min": 0,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "ltv",
      "label": "Lifetime value",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "ratio",
      "label": "LTV : CAC ratio",
      "format": "decimal",
      "hint": null,
      "primary": false
    },
    {
      "id": "lifespan",
      "label": "Average lifespan (months)",
      "format": "decimal",
      "hint": null,
      "primary": false
    },
    {
      "id": "paybackMonths",
      "label": "CAC payback (months)",
      "format": "decimal",
      "hint": null,
      "primary": false
    },
    {
      "id": "verdict",
      "label": "Read",
      "format": "raw",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Average revenue per user: 89 $/mo",
      "Gross margin: 78 %",
      "Monthly churn rate: 3.5 %",
      "CAC: 620 $"
    ],
    "outputs": [
      "Lifetime value: $1,983.43",
      "LTV : CAC ratio: 3.2",
      "Average lifespan (months): 28.6",
      "CAC payback (months): 8.9",
      "Read: Healthy unit economics"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter average revenue per user ($/mo).",
      "Enter gross margin (%).",
      "Enter monthly churn rate (%).",
      "Enter cac ($).",
      "Read your lifetime value on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "arpu": 53,
        "margin": 47,
        "churn": 2.1,
        "cac": 370
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "arpu": 89,
        "margin": 78,
        "churn": 3.5,
        "cac": 620
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "arpu": 142,
        "margin": 100,
        "churn": 5.6000000000000005,
        "cac": 990
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "How does the customer lifetime value calculator work?",
      "a": "LTV is gross-margin dollars, not revenue — counting revenue inflates it by whatever your delivery costs are. Healthy subscription businesses run an LTV:CAC of 3 or better. The underlying maths is: Lifespan = 1 ÷ Monthly churn. LTV = ARPU × Gross margin × Lifespan."
    },
    {
      "q": "What do I need to enter?",
      "a": "4 values: average revenue per user, gross margin, monthly churn rate, and cac. Each field starts with a sensible default, so you can change one number at a time and watch the result move."
    },
    {
      "q": "What does the lifetime value result mean?",
      "a": "It is returned as a money amount in US dollars and updates live as you edit the inputs, so you can compare two or three versions of a scenario in a few seconds."
    },
    {
      "q": "Is this calculator free, and do I need an account?",
      "a": "Yes, it's free, and no account is required. Nothing you type is stored on our servers — the maths runs entirely in your browser."
    },
    {
      "q": "How accurate is the result?",
      "a": "It applies the standard formula exactly, so the arithmetic is precise. Results are estimates before tax, fees, and inflation unless an input explicitly covers them."
    },
    {
      "q": "Who is this tool for?",
      "a": "It's built for anyone comparing money scenarios before committing — budgeting a payment, sanity-checking a quote, or seeing what a change in rate or term actually costs."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/cac",
    "https://www.revenuelab.fyi/toolbox/churn-rate",
    "https://www.revenuelab.fyi/toolbox/saas-payback"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Customer Lifetime Value Calculator (https://www.revenuelab.fyi/toolbox/ltv)"
}