Quick answer
Customer lifetime value (LTV) = average revenue per user × gross margin ÷ churn rate. $50 a month at a 70% margin with 3% monthly churn gives $1,166.67 and an expected lifetime of 33.33 months.
Enter monthly revenue per user, gross margin and monthly churn. The calculator returns lifetime value and expected lifetime.
Related tools: Average Order Value Calculator: Revenue per order. YouTube Earnings Calculator: Estimated ad earnings from views and RPM. Conversion Rate Calculator: Share of visitors who convert.
How to use the Customer Lifetime Value Calculator
- Enter average revenue per customer per month ($) (above 0).
- Enter gross margin (%) (between 0 and 100).
- Enter monthly churn rate (%) (between 0 and 100).
- Press Calculate to see the result, and use Reset to start again.
| Input | What to enter | Allowed values |
|---|---|---|
| Average revenue per customer per month | A number, in $ | > 0 |
| Gross margin | A number, in % | > 0, ≤ 100 |
| Monthly churn rate | A number, in % | > 0, ≤ 100 |
Formula and method
Formula
LTV = ARPU × gross margin ÷ churn rate
IEEE-754 double precision; shown to the decimals indicated.
Simple steady-state model; it ignores discounting and changes in behavior.
Worked examples
These examples are verified: each one is an automated test case that the live calculator must reproduce exactly.
Example 1
Inputs: Average revenue per customer per month = 50; Gross margin = 70; Monthly churn rate = 3.
| Result | Value |
|---|---|
| Customer lifetime value | $1,166.67 |
| Expected lifetime (months) | 33.33 |
Example 2
Inputs: Average revenue per customer per month = 200; Gross margin = 60; Monthly churn rate = 5.
| Result | Value |
|---|---|
| Customer lifetime value | $2,400.00 |
| Expected lifetime (months) | 20 |
The first line is the headline result (customer lifetime value). Below it the customer Lifetime Value Calculator lists expected lifetime (months), which describe the same case from other angles. IEEE-754 double precision; shown to the decimals indicated.
The arithmetic
Gross profit per month is $50 × 0.70 = $35. Expected lifetime is 1 ÷ 0.03 = 33.33 months. Multiplying gives $35 × 33.33 = $1,166.67. Cutting churn to 2% raises the lifetime to 50 months and LTV to $1,750.
Use with acquisition cost
A common rule of thumb is for LTV to be at least three times the cost to acquire a customer. The formula assumes constant churn and no discounting, so treat it as an estimate. Churn must be above zero.
How the result changes with average revenue per customer per month
Holding every other input at the first worked example, this table changes only average revenue per customer per month. It shows how sensitive the answer is to that one value; each row was produced by running this calculator.
| Average revenue per customer per month | Customer lifetime value | Expected lifetime (months) |
|---|---|---|
| 25 | $583.33 | 33.33 |
| 50 | $1,166.67 | 33.33 |
| 100 | $2,333.33 | 33.33 |
| 200 | $4,666.67 | 33.33 |
What happens with invalid input
These messages are produced by the calculator itself, so you know what to fix.
- Average revenue per customer per month: entering "0" shows "Average revenue per customer per month must be greater than 0." beside that field and no result.
- Monthly churn rate: entering "0" shows "Monthly churn rate must be greater than 0." beside that field and no result.
Choosing between the Customer Lifetime Value Calculator and similar calculators
Each row shows what a related calculator on this site asks for and what it returns, so you can pick the one that matches your question.
| Calculator | You enter | It returns |
|---|---|---|
| [Average Order Value Calculator](/business/average-order-value-calculator/) | total revenue and number of orders | Average order value |
| [YouTube Earnings Calculator](/business/youtube-money/) | views and revenue per 1,000 views | Estimated earnings |
| [Conversion Rate Calculator](/business/conversion-rate-calculator/) | conversions and visitors | Conversion rate |
| [Cost Per Acquisition Calculator](/business/cost-per-acquisition-calculator/) | marketing and sales spend and new customers or conversions | Cost per acquisition |
| [Cost Per Click Calculator](/business/cost-per-click-calculator/) | ad spend and clicks | Cost per click |
Background: business metrics
Business ratios depend on exactly which costs and revenues you include, so read each page's definition. Two common checks: break-even units = fixed costs ÷ (price − variable cost per unit), so $50,000 of fixed costs with a $10 price and $5 variable cost breaks even at 10,000 units; and net profit margin = net profit ÷ revenue, so $20,000 profit on $100,000 revenue is 20%.
Return on investment ignores time: 20% over five years is far less impressive than 20% in one, so compare returns over the same period.
Assumptions and limitations
- Churn must be above zero
If a required value is empty, not a number, or outside its allowed range, the form marks that field with a message and shows no result instead of a misleading number. The automated checks deliberately try invalid entries for average revenue per customer per month and monthly churn rate to confirm this.
Frequently asked questions
What is a good LTV to CAC ratio?
About 3 to 1 is often cited.
Should I use revenue or profit?
Gross profit gives a more realistic value.
Does it work for one-off purchases?
Not well; it is built for recurring revenue.
What does the Customer Lifetime Value Calculator calculate?
Customer lifetime value from revenue, margin and churn. It returns Customer lifetime value and Expected lifetime (months).
What formula does the Customer Lifetime Value Calculator use?
LTV = ARPU × gross margin ÷ churn rate. Simple steady-state model; it ignores discounting and changes in behavior.
What do I need to enter in the customer Lifetime Value Calculator?
You enter Average revenue per customer per month ($), Gross margin (%) and Monthly churn rate (%).
How is the result rounded or limited?
IEEE-754 double precision; shown to the decimals indicated. Churn must be above zero.
What is an example of a customer Lifetime Value result?
With average revenue per customer per month 50, gross margin 70 and monthly churn rate 3, the customer lifetime value is $1,166.67.
Related calculators
- Average Order Value Calculator — Revenue per order.
- YouTube Earnings Calculator — Estimated ad earnings from views and RPM.
- Conversion Rate Calculator — Share of visitors who convert.
- Cost Per Acquisition Calculator — Cost of acquiring one customer or conversion.
- Cost Per Click Calculator — Average cost of each ad click.
- P-Value Calculator — P-value from a z, t, chi-square or F statistic.
- Coin Value Converter — Convert pennies, nickels, dimes and quarters to dollars and back.
Sources
- Common definition used on this page. No single authoritative standard defines it, so the exact formula is stated in the formula section above
Content last reviewed 2026-11-04. Formulas and worked examples are checked by automated tests against independently computed values.