Customer Lifetime Value (LTV) Calculator
Estimate the gross profit a customer is expected to bring over their lifetime, with an optional discounted view.
Quick answer
Customer lifetime value is the gross profit a customer is expected to generate before leaving: LTV = ARPA x gross margin / monthly churn, where ARPA is average monthly revenue per account.
Customer Lifetime Value (LTV) Calculator
Set to 0 or leave blank for no discounting.
LTV (undiscounted)
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LTV (discounted)
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Expected Lifetime
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Monthly Margin per Account
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Lifetime Revenue
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LTV at Different Churn Rates
| Monthly churn | Lifetime (months) | LTV (₹) | Discounted LTV (₹) |
|---|
Assumptions & method
- Monthly margin m = ARPA × gross margin. Simple LTV = m ÷ churn = m × expected lifetime (1 ÷ churn months).
- Timing: the first month's margin is earned with certainty; each later month is earned with probability (1 − churn)^t.
- Discounted LTV = m × (1 + d) ÷ (d + churn), where d = (1 + annual rate)^(1/12) − 1. With d = 0 it equals the simple LTV.
- The chart sums expected margin over 60 months; the totals above extend over an unlimited horizon.
- Not included: expansion revenue, acquisition cost, changing prices, and variation in churn over a customer's life.
Results are estimates based on the figures you enter. They are not guarantees and not financial advice.
What customer lifetime value means
Lifetime value estimates how much gross profit an average customer generates before leaving. Take the monthly gross profit per account, which is revenue per account multiplied by gross margin, and divide it by monthly churn. Dividing by churn is the same as multiplying by the expected lifetime in months, one over churn. Because later months are worth less than earlier ones, a discount rate gives a more cautious present-value figure. LTV depends heavily on churn, so a small change in that input can move the answer a lot. It is a model of an average customer, not a promise about any single account.