SaaS LTV & Churn Calculator

About this tool

In a subscription business, the most important question is brutally simple: is each customer worth more than they cost to acquire? Customer Lifetime Value (LTV) answers it. Divide average revenue per account by the churn rate, and you know what a customer is worth before they leave.

Churn is the silent killer founders underestimate. Five percent monthly churn sounds small - until you learn it means losing 46% of your customers every year. This calculator converts that innocent monthly number into annual churn and average lifetime, so the real picture is impossible to ignore.

How to use

Enter your ARPA (average monthly revenue per account), your monthly churn rate as a percent, and your gross margin percent (100 if you are not sure). Press Calculate LTV.

You get the customer lifetime value in dollars, the true annual churn rate, and the average customer lifetime in months. The golden rule it tests: LTV should be at least 3x your customer acquisition cost - otherwise the business model leaks.

The math behind it

LTV = ARPA x gross margin / churn rate (as a decimal). Annual churn = 1 - (1 - monthly churn)^12, because surviving customers compound: 5% monthly churn leaves 0.95^12 = 54% after a year, i.e. 46% churned.

Average lifetime = 1 / churn rate: at 5% monthly churn the average customer stays 20 months. Small churn improvements explode LTV - cutting churn from 5% to 4% raises lifetime value by 25%.

Frequently asked questions

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