LTV
SaaS LTV Calculator.
Lifetime Value is the gross profit one customer generates between signup and churn. The canonical formula divides monthly ARPU by your monthly churn rate (to get the expected lifetime in months), then multiplies by gross margin (to strip out the cost of serving them). For an indie SaaS at $49 a month with 90 percent gross margin and 5 percent monthly churn, that lands at $882 of lifetime gross profit per customer. If that number is smaller than what you spend acquiring a customer, you do not have a business yet – you have a charity for paid ads.
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Formula
LTV = (ARPU × Gross Margin %) / Monthly Churn %Calculator
Inputs
Revenue minus cost of goods sold (hosting, AI inference, payment fees), as a percentage of revenue.
Customers who fully cancel, as a percentage of your base each month. Use gross churn, not net.
Result
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Frequently asked
- What is a healthy LTV for an indie SaaS?
- There is no universal floor. The useful test is the LTV-to-CAC ratio: if LTV divided by customer acquisition cost is at least 3 to 1, the unit economics work. Below that, every paid customer drains the business.
- Should I use monthly or annual churn?
- Monthly churn for this formula. If you only know annual churn, divide it by 12 as a first-pass approximation. The result will be slightly conservative, which is the right direction for a pre-revenue projection.
- What gross margin should an indie SaaS use?
- Most pure-software indie SaaS land between 80 and 90 percent. If you resell infrastructure (hosting, AI inference, SMS) you may be lower. Use your actual cost of goods sold divided by revenue – not the industry average.
Related calculators
- Monthly Churn Cost Calculator – How much revenue evaporates every month while you focus on acquisition? The number that gets retention on the roadmap.
- Post-Launch Revenue Projector – Where does your MRR actually land in twelve months given your real churn and acquisition rate? See the curve.
- CAC Payback Period Calculator – How many months of gross profit does it take a paid customer to pay back their acquisition cost? Below twelve, you can scale.
- Pricing Power Calculator – What happens to LTV, payback, and LTV-to-CAC if you raise your price 50 percent? Side-by-side answer.