What is it?
LTV approximates the gross value a customer generates across their lifetime with your product.
Unit economics
Customer lifetime value (LTV)
LTV approximates the gross value a customer generates across their lifetime with your product.
Enter average revenue per period, gross margin %, and customer lifespan in months.
Customer lifetime value (LTV)
Inputs
Results
Monthly contribution
—
LTV
—
Guide
What LTV is
Why it matters
Without LTV you cannot set a sensible ceiling for CAC, growth budget, or subscription pricing.
How it works
Enter average revenue per period, gross margin %, and customer lifespan in months.
Formula LTV = ARPU × (Margin% ÷ 100) × Lifespan (months)
Go deeper
Why you’ll love this
LTV estimates what one customer is worth over their relationship with your product — the ceiling for acquisition spend and pricing.
How to jump in
-
Enter ARPU
Average monthly revenue per customer.
-
Add margin and lifespan
Gross margin % and average months retained.
-
Read LTV
Monthly contribution and lifetime value update live.
What you walk away with
- Fast estimate
- What / why / how guide
- Ready for LTV/CAC
- IRR and USD
Where it shines
CAC ceiling
Know the maximum sensible spend per customer.
Subscription pricing
See how price or churn changes LTV.
Revenue model
Make unit-economics assumptions explicit.
Quick answers
Is this formula exact?
It is a practical early estimate; cohort models can come later.
Where does margin come from?
The share of revenue left after variable costs — start conservative if unsure.