Metrics
LTV (Lifetime Value)
Quick definition
Total gross profit a customer generates over their lifetime.
LTV = ARPU × Gross Margin / Churn Rate. The right LTV uses gross margin (not revenue) and a churn rate measured on the same cohort. LTV/CAC above 3x is a rule-of-thumb minimum for a healthy SaaS business.
Related metrics terms
ARR (Annual Recurring Revenue)
Annualized value of your subscription revenue at a point in time.
MRR (Monthly Recurring Revenue)
Monthly equivalent of ARR, useful for month-over-month tracking.
Net Revenue Retention (NRR)
Revenue from your existing customer base 12 months later, including expansion and churn.
Gross Revenue Retention (GRR)
NRR without upsell — what you keep before expansion.
See this in action
Insights and tools where LTV (Lifetime Value) shows up.
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