Calculate customer LTV, average lifetime, LTV:CAC ratio, CAC payback, and discounted LTV
| LTV : CAC | Category | What it means |
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| Metric | Value | Notes |
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| Scenario | Churn | Lifetime | LTV |
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Faiq Ur Rahman is a web designer, digital product developer, and founder of Toolraxy, a growing platform of web-based calculators and utility tools. He specializes in building structured, user-friendly tools focused on health, finance, productivity, and everyday problem-solving.
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This SaaS LTV calculator turns your ARPU, churn rate, and expansion into a clear lifetime value figure. Enter gross margin, CAC, and discount rate to see simple LTV, discounted LTV, average lifetime, and LTV:CAC ratio. It’s built for founders, analysts, and growth teams who need quick unit economics. Everything runs in your browser with 45+ currencies.
SaaS lifetime value (LTV) is the total gross profit a customer generates over their entire relationship with your product. This calculator builds that number from the inputs you already track: ARPU, gross margin, monthly churn, and expansion uplift. It also computes average customer lifetime, LTV:CAC ratio, and CAC payback. Founders, CFOs, and growth leads use it to decide whether to scale acquisition or fix retention first. The math follows standard SaaS formulas: simple LTV equals gross margin per customer divided by net churn, and discounted LTV applies a monthly discount rate to present-value future profit. A scenario table shows what happens if churn moves up or down.
Pick a currency. The symbol updates on all money fields. The math stays the same across all 45+ currencies.
Enter ARPU, your average monthly revenue per user.
Set gross margin percentage. SaaS typically runs 70% to 90%.
Enter monthly customer churn rate. This is the percentage of customers who cancel each month.
Add monthly expansion uplift if you have it. This is revenue growth from upsells and cross-sells.
Optional: enter CAC to unlock LTV:CAC ratio and payback period.
Optional: set a monthly discount rate to compute present-value LTV.
Read the hero tile for simple LTV, then check the breakdown and scenario tables.
The calculator uses standard SaaS unit economics formulas. Net churn drives everything.
Formula: Net Churn Rate = Monthly Churn − Monthly Expansion Uplift
Formula: Gross Margin per Customer = ARPU × (Gross Margin % ÷ 100)
Formula: Average Customer Lifetime = 100 ÷ Net Churn Rate
Formula: Simple LTV = Gross Margin per Customer ÷ (Net Churn Rate ÷ 100)
Formula: Discounted LTV = (Gross Margin per Customer × (1 + Monthly Discount Rate)) ÷ (Monthly Discount Rate + Net Churn Rate)
Formula: LTV:CAC Ratio = Simple LTV ÷ CAC
Formula: CAC Payback = CAC ÷ Gross Margin per Customer
A few edge cases matter. If net churn is zero or negative, average lifetime becomes infinite and simple LTV is capped at 120 months of gross margin. The calculator handles this by capping the LTV value. If CAC is zero, the LTV:CAC ratio and payback are hidden. The discounted LTV formula uses a perpetuity with growth approach, capped at the same 120-month limit.
A SaaS company with $89 ARPU, 82% gross margin, 2.4% monthly churn, and 0.8% expansion uplift. CAC is $420. Monthly discount rate is 1.0%.
Step 1 – Net churn. 2.4% − 0.8% = 1.6%.
Step 2 – Gross margin per customer. $89 × 0.82 = $72.98.
Step 3 – Average lifetime. 100 ÷ 1.6 = 62.5 months.
Step 4 – Simple LTV. $72.98 ÷ 0.016 = $4,561.25.
Step 5 – LTV:CAC. $4,561.25 ÷ $420 = 10.86×.
Step 6 – CAC payback. $420 ÷ $72.98 = 5.75 months.
Step 7 – Discounted LTV. ($72.98 × 1.01) ÷ (0.01 + 0.016) = $73.71 ÷ 0.026 = $2,835.00.
Interpretation: The simple LTV is $4,561 over an average lifetime of 62.5 months. The LTV:CAC ratio of 10.86× is exceptional, well above the 3× benchmark. CAC payback is 5.75 months, also strong. The discounted LTV of $2,835 is lower because future cash flows are discounted at 1% per month. This business can confidently invest in growth, but should verify CAC is fully loaded and LTV assumptions are conservative.
Divide gross margin per customer by net churn rate. Gross margin per customer is ARPU times gross margin percentage. Net churn is monthly churn minus expansion. For $100 ARPU, 80% margin, and 2% net churn, LTV is $80 ÷ 0.02 = $4,000.
3:1 or higher is the industry benchmark. Below 1:1 means you lose money on every customer. 1:1 to 2:1 is poor. 3:1 to 5:1 is healthy. Above 5:1 is excellent. The calculator labels your ratio from critical to exceptional.
Divide CAC by gross margin per customer per month. A $300 CAC with $50 monthly gross margin gives a 6-month payback. Most SaaS companies target under 12 months. Shorter payback means faster cash recovery.
Simple LTV is the undiscounted sum of future gross margin. Discounted LTV applies a monthly discount rate to account for the time value of money. Discounted LTV is always lower. Use simple LTV for quick comparisons and discounted LTV for investment decisions.
Churn is the biggest driver. A 2% monthly churn gives a 50-month average lifetime. A 4% churn cuts that to 25 months and halves LTV. Reducing churn from 2% to 1.5% increases LTV by 33%. The scenario table shows these trade-offs.
Negative churn happens when expansion revenue exceeds churn. If monthly expansion is higher than monthly churn, net churn is negative. Average lifetime becomes infinite and LTV grows unbounded. The calculator caps the display at 120 months but the underlying metric is effectively infinite.
It depends on your churn rate. A 2% monthly churn gives 50 months (4.2 years). A 1% churn gives 100 months (8.3 years). Enterprise SaaS often sees 5 to 10 years. SMB SaaS often sees 2 to 4 years. Compare against your segment.
Expansion from upsells and cross-sells reduces net churn and increases LTV. A 0.5% monthly expansion on a 2% churn rate cuts net churn to 1.5%, raising LTV by 33%. Expansion is the most efficient way to grow LTV.
The SaaS quick ratio measures growth efficiency: (new MRR + expansion MRR) ÷ (churned MRR + contraction MRR). A ratio above 4 is considered healthy. It’s a different metric from LTV but related to retention and expansion.
Yes. Enter the cohort’s ARPU, churn rate, and expansion rate. The LTV is specific to that cohort. Repeat for other cohorts to compare.
Most SaaS companies use 0.8% to 1.5% monthly, which represents the cost of capital. A higher discount rate lowers discounted LTV. Use your company’s internal hurdle rate if you have one.
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