SaaS LTV Calculator

Example of SaaS LTV Calculation

Let's assume you have the following parameters:

• Number of customers: 25
• Monthly recurring revenue (MRR): $6,000
• Gross margin: 65%
• Churn rate: 4%
• Account expansion: $0

The LTV is calculated as:

\[ \text{LTV} = \left[ 0.5 \times \frac{1}{\text{Churn}} \times \left( 2 \times \text{ARPA} + \text{Account Expansion} \times \left( \frac{1}{\text{Churn}} - 1 \right) \right) \right] \times \text{Margin} \]

For our example, the LTV is $4,062.50.