SaaS LTV Calculator
SaaS businesses rely heavily on customer lifetime value to determine acquisition budgets, forecast revenue, and evaluate business health. The recurring revenue model makes LTV calculation particularly critical since the entire business model depends on customers staying longer than the payback period.
SaaS Industry Benchmarks
Typical SaaS Starting Values
$99
5%
80%
Quick estimate: With these typical SaaS values, the estimated LTV would be $1,584 per customer (using the gross-margin-adjusted formula).
Calculate Your SaaS LTV
Use our free LTV calculator with your actual numbers. Supports simple LTV, gross-margin-adjusted, and cohort-based calculation methods.
Open LTV CalculatorSaaS LTV: Frequently Asked Questions
A good SaaS LTV depends on your segment. SMB SaaS typically targets $1,000-$5,000 LTV, mid-market aims for $10,000-$50,000, and enterprise SaaS can exceed $100,000+. More importantly, your LTV:CAC ratio should be at least 3:1 to ensure sustainable growth.
For annual contracts, convert to monthly metrics first. Take your annual contract value and divide by 12 to get monthly ARPU. For churn, use annual churn rate divided by 12 for a monthly approximation (though this slightly overestimates). Then apply the standard formula: LTV = (Monthly ARPU x Gross Margin) / Monthly Churn Rate.
Always use revenue churn (also called MRR churn) for LTV calculations. Logo churn (customer count churn) can be misleading because it treats all customers equally regardless of their contract size. A SaaS company might have 5% logo churn but only 2% revenue churn if smaller customers churn more often than large ones.
Expansion revenue (upsells, cross-sells, seat additions) can significantly increase LTV. If your net revenue retention exceeds 100%, your existing customers are worth more over time even without adding new ones. Include expansion in LTV by using net revenue churn instead of gross churn: Net Churn = Gross Churn - Expansion Rate.