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Cohort LTV Calculator

Estimate discounted customer lifetime value from revenue per customer, gross margin and monthly churn, and see a safe maximum CAC.

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Cohort inputs

Your cost of capital. Future revenue is worth less than revenue today.

Cohort lifetime value

-

Discounted gross-profit LTV per customer

Average lifetime (months)-
Simple LTV (no discounting)-
Customers left after 12 months-
Suggested maximum CAC (3:1)-

Enter your cohort numbers to see LTV.

Why discounted LTV beats simple LTV

The simple LTV formula (monthly gross profit divided by churn) treats revenue ten years from now as if it were worth the same as revenue this month. It is not: money later is worth less than money now, and long tails of revenue are the least certain part of any forecast. Discounted cohort LTV applies a discount rate to each future month, which gives a more conservative and more realistic number.

How the calculation works

  • Each month, the remaining customers in the cohort pay the average monthly revenue, multiplied by your gross margin.
  • A share of customers equal to your monthly churn rate leaves after each month.
  • Each month's gross profit is discounted back to today using the monthly equivalent of your annual discount rate.
  • The sum is capped at 10 years, which keeps very low churn rates from producing unrealistic values.

The suggested maximum CAC uses the common 3:1 LTV to CAC benchmark.

Frequently asked questions

What discount rate should I use?

Use your cost of capital if you know it. Many SaaS teams use 10 to 15%, and subscription consumer brands often use 8 to 12%. Earlier-stage, riskier businesses justify a higher rate.

Should I use revenue or gross profit?

Gross profit. Revenue-based LTV ignores the cost of delivering the service, which makes CAC comparisons look better than they are.

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