Customer Lifetime Value Calculator

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Estimate only. Platform fees, taxes and policies vary by country, account, category and date. Verify important decisions against your current statement or official fee schedule.

Monthly Gross Profit —

Estimated Lifetime Months —

Customer Lifetime Value —

Calculator guide

Estimate LTV from gross profit rather than revenue alone

This calculator estimates customer lifetime as the inverse of monthly churn and multiplies that lifespan by monthly gross profit per customer. It is a simplified steady-state model for recurring businesses.

Use gross margin rather than revenue when comparing LTV with acquisition cost. Revenue-only LTV can overstate the economic value available to recover marketing, sales, support and overhead.

Churn must be entered as a monthly rate. Convert quarterly or annual churn to an equivalent monthly assumption before using the model, and avoid dividing an annual churn percentage by twelve without checking compounding.

Validate the estimate with cohort data. Customer behavior, expansion, contraction, retention curves and margin often change over a customer relationship, so a cohort or discounted cash-flow model may be better for mature analysis.

Formula

Estimate LTV from gross profit rather than revenue alone

Estimated lifetime months = 1 ÷ Monthly churn rate; LTV = Monthly revenue × Gross margin rate × Lifetime months

Calculate monthly gross profit per customer.
Convert monthly churn percentage to a decimal.
Estimate lifetime as one divided by churn.
Multiply monthly gross profit by estimated lifetime.

Worked example

Inputs

Scenario: $100 monthly revenue at 80% gross margin and 4% monthly churn gives $80 monthly gross profit, 25 months estimated lifetime and $2,000 LTV.

Results

Result: $100 monthly revenue at 80% gross margin and 4% monthly churn gives $80 monthly gross profit, 25 months estimated lifetime and $2,000 LTV.

Rounded values; replace assumptions in the live calculator.

Frequently asked questions

Customer Lifetime Value Calculator FAQ

What should I verify before using this metric?

Verify the time period, population, currency, attribution and revenue or cost definition. Save those assumptions with the report so future comparisons use the same scope.

How accurate is the result?

The arithmetic follows the displayed formula. Accuracy depends on using complete inputs from the same reporting period and applying one consistent definition to customers, revenue and costs.

Can I use another currency?

Yes. Keep every monetary input in the same currency. Ratios and percentages remain comparable, but the calculator does not perform foreign-exchange conversion.

Should I use gross or net revenue?

Use the revenue definition that matches your reporting purpose and keep it consistent across periods. Document whether discounts, refunds, credits and taxes are included.

Why should I compare several periods?

A single month can be distorted by seasonality, annual renewals, campaigns or one-off contracts. Compare a consistent monthly or quarterly series before making a decision.

Is this an accounting standard?

No. It is an independent planning tool. Reconcile the result with your billing platform, analytics system and financial reporting policies.

Are my inputs uploaded?

No. Calculations run locally in the browser and do not require sending calculator inputs to a server.

Primary sources