SaaS CLV inputs
Enter your monthly metrics
Use ARPA and customer churn from the same monthly cohort and reporting method.
Estimated result
Your customer value snapshot
Your estimated customer value and lifetime will appear here.
Calculation breakdown
How your results were calculated
| Metric | Formula | Result |
|---|---|---|
| Enter your values and calculate to see the breakdown. | ||
What Is Customer Lifetime Value?
Customer lifetime value, also called CLV or LTV, estimates the economic value an average customer may generate during the relationship with a business. For a subscription business, a common simple model combines monthly average revenue per account, gross margin, and monthly customer churn.
Customer Lifetime Value Formula
Enter percentage values as percentages. For example, enter a 5% monthly churn rate as 5, not 0.05.
What Each Input Means
Monthly ARPA
Average revenue per account is the average recurring revenue generated by one customer account per month. Use ARPU instead only when one user represents the customer unit you analyze.
Gross margin
Gross margin is revenue remaining after cost of goods sold, expressed as a percentage of revenue. Including it turns a revenue estimate into a gross-profit-based CLV estimate.
Monthly customer churn
Customer churn is the percentage of starting customers lost during a month. Use customer churn rather than revenue churn in this simplified lifetime formula.
Important Limitations
This simplified formula assumes churn behaves at a stable rate and does not model expansion, contraction, reactivation, customer segments, discount rates, or changing margins. It becomes unstable when churn is extremely low and cannot calculate a finite lifetime when churn is zero. Use cohort or predictive models when your customer behavior changes significantly over time.
CAC is intentionally excluded. Compare this result with acquisition cost using the separate LTV-to-CAC Ratio Calculator.
Frequently Asked Questions
How do you calculate SaaS customer lifetime value?
Multiply monthly ARPA by gross margin, then divide by the monthly customer churn rate expressed as a decimal.
Why does the calculator use gross margin?
Gross margin adjusts revenue for the direct cost of delivering the service, creating a gross-profit-based estimate instead of a revenue-only total.
Should I use customer churn or revenue churn?
Use customer churn for this simplified formula because the estimated lifetime represents how long an average customer account remains active.
Can I calculate CLV with zero churn?
No. Dividing by zero does not produce a finite estimate. Use a longer observation period or a cohort-based model when no customers churn during a short period.
Are CLV and LTV the same?
They are commonly used interchangeably in SaaS. Both describe the estimated value generated by a customer during the relationship.
Does this calculator include CAC?
No. Customer acquisition cost is a separate metric and belongs in an LTV-to-CAC comparison.
Methodology Sources
The formula and definitions were checked against ChartMogul’s LTV guide, Stripe’s CLV guide, and Paddle’s LTV methodology.