Free calculator

LTV & LTV:CAC calculator

Lifetime value is gross profit per month divided by churn — not revenue, and not a guess about how long people stay. Against your acquisition cost it gives the ratio that decides how much you can afford to spend on growth.

Revenue per customer per monthARPA, with annual plans counted as price ÷ 12.€Gross marginAfter the direct cost of serving that customer.%Monthly churn rateRevenue churn if you have it, customer churn otherwise.%Customer acquisition costAll sales and marketing spend ÷ new customers.€

Lifetime value

€2,085

Above 3:1 — there is room to spend more on acquisition.

Gross profit per customer per month: €72.98
Average customer lifetime: 28.6 months
LTV : CAC: 9.93×
CAC payback: 2.9 months
Revenue-based LTV, for comparison: €2,543

Calculated in your browser. Nothing is sent anywhere.

The number

Why LTV has to be built on gross profit

The revenue version of LTV is always bigger and always wrong: it counts money you pay straight back out in hosting, support and payment fees. At an 82% gross margin the two differ by a fifth, and that fifth is the whole difference between a 3:1 and a 2.5:1 ratio.

LTV = (ARPA × gross margin) ÷ monthly churn rate

Getting it right

This assumes a constant churn rate. Real cohorts churn fastest early, which makes the true LTV higher than this.
A ratio above 5:1 usually means you are underspending on growth, not that you are efficient.
LTV is a valuation number, not a cash number: it says nothing about when the money arrives.

CAC payback calculator Churn impact calculator Break-even ROAS calculator

Templates that go further

Change the ad budget

Move the spend and watch margin, cash and the runway date move with it, before you change anything in the ad account.

Churn & cohort analysisHow long a signup cohort stays, what it is worth, and when it has paid back its CAC.Subscription revenue forecastMarketing spend in, customers out, and the MRR that survives your churn rate.MRR & ARR trackerCustomers in, customers out, and where the recurring revenue actually moved.

Change the ad budget All Excel templates

Questions

LTV & LTV:CAC calculator — What people ask about it

What is a good LTV:CAC ratio?

Three to one is the conventional target. Below that, acquisition eats too much of what a customer is worth; far above it, you are usually leaving growth on the table because you could spend more and still be well inside a healthy range.

Should I cap the customer lifetime?

Many finance teams cap it at 36 months, because a 1% churn rate implies a 100-month lifetime that no forecast should rely on. Capping makes the number more conservative and much easier to defend.

One number is an average. Your cash moves day by day.

Connect your accounting data and Foreqast keeps this calculation live — with every committed cost on the date it actually lands.

Get early access

All calculators