SaaS & growth

Customer Lifetime Value (LTV) Calculator

Estimate lifetime revenue from purchase value, annual frequency and customer lifespan.

Free, no sign-upRuns in your browserReviewed October 2026Formula & methodology
US dollars
purchases/year
years

Results update as you type. Your numbers stay in this browser.

Estimated lifetime revenueExample$900.00
Revenue per customer per year
$300.00

Understand the result

What is Customer Lifetime Value (LTV)?

Customer lifetime value (LTV or CLV) estimates the total revenue one customer brings in over the whole relationship. The simple formula is average purchase value × purchases per year × years as a customer: $50 × 6 × 3 = $900. Multiply by gross margin to turn it into lifetime profit before comparing it with acquisition cost.

Revenue LTVAvg. purchase × Purchases per year × Years
Profit LTVRevenue LTV × Gross margin
Subscription LTVMonthly revenue per account ÷ Monthly churn rate

Example: a specialty coffee subscription

Customers spend $50 per order, order 6 times a year and stay about 3 years. Gross margin is 40%.

  1. Revenue LTV: $50 × 6 × 3 = $900
  2. Profit LTV: $900 × 0.40 = $360
  3. If it costs $90 to acquire a customer, LTV:CAC on profit is 4:1

For a monthly plan at $100 with 4% monthly churn, the subscription formula gives $100 ÷ 0.04 = $2,500 of lifetime revenue.

Common mistakes

  • Comparing revenue LTV with CAC. Acquisition cost is paid from profit, so use profit LTV for the ratio.
  • Assuming lifespans you have not observed. A two-year-old business cannot know it keeps customers for five years. Use cohort data or stay conservative.
  • One LTV for every channel. Customers from referrals and from discounts usually behave differently. Segment when you can.
Common questions

Customer Lifetime Value (LTV) FAQ

What is a good LTV to CAC ratio?

A common rule of thumb in subscription businesses is about 3:1 on a profit basis, but the right ratio depends on cash, payback period and growth goals. Below 1:1 you lose money on every customer you acquire.

Can I compare this directly with CAC?

Convert it to profit first by multiplying by your gross margin. This calculator shows revenue LTV, which overstates what you can afford to spend on acquisition.

How do I estimate customer lifespan?

For subscriptions, 1 ÷ monthly churn gives the average lifetime in months. For repeat-purchase businesses, look at how long past customer cohorts kept ordering.

Should LTV be discounted for the time value of money?

For long lifetimes or high interest rates, yes. This simple model does not discount future revenue, so treat it as an upper estimate.

Guides for this calculation

Build context around the numbers with worked examples from our guides.

How to Calculate Average Order Value (AOV): Formula, Examples, and Growth Strategies →