3D Printer – Buy vs Outsource CalculatorAbsence Percentage CalculatorAccumulated Depreciation CalculatorAdditional Funds Needed CalculatorAttrition Rate CalculatorAverage Collection Period CalculatorBounce Rate CalculatorBradford Factor CalculatorBreak-even CalculatorBuild vs. Buy CalculatorBurndown Chart CalculatorBusiness Budget CalculatorBusiness Loan CalculatorChurn Rate CalculatorContribution Margin CalculatorCost of Doing Business CalculatorCPC and CPM CalculatorCPM CalculatorCTR CalculatorCustomer Acquisition Cost Calculator – CAC CalculatorCustomer Retention Rate CalculatorEVM CalculatorEffective Corporate Tax Rate CalculatorEMV Calculator – Expected Monetary ValueExit Rate CalculatorFIFO Calculator for InventoryFTE CalculatorGMROI CalculatorGoogle AdSense CalculatorGRP CalculatorHHI Calculator (Herfindahl-Hirschman Index Calculator)High-Low Method CalculatorLabor Cost CalculatorLemonade Stand CalculatorLiquid Net Worth CalculatorMan-Hours CalculatorDays Off CalculatorOnline Marketing Conversion CalculatorParking Ratio CalculatorPayback Period CalculatorPre-Money and Post-Money Valuation CalculatorPVGO CalculatorPrice Per Unit CalculatorProfitability Index CalculatorRevenue Per Employee CalculatorROAS CalculatorSaaS Lifetime Value CalculatorSaaS Metrics CalculatorSales Commission CalculatorSell-Through Rate CalculatorSmoker’s CTC Calculator – Cost to CompanySoftware Contract Value CalculatorTenure CalculatorTurnover Rate CalculatorWebsite Ad Revenue CalculatorYouTube Money Calculator

Introduction to SaaS LTV Estimation

When navigating the world of Software as a Service (SaaS), understanding your customer lifetime value (LTV) is crucial. Our SaaS LTV calculator aids in analyzing sales and estimating the average net profit from a customer over their entire engagement with your service.

Two Modes: Simple and Advanced

The calculator operates in two modes: simple and advanced. Let’s start by dissecting the parameters in the simple mode.

ARPA (Average Revenue per Account):

This is the money earned from each subscription account per month.

Gross Margin:

Representing the profit retained from each revenue dollar, it is calculated as (revenue – costs)/revenue.


The percentage of users discontinuing the service each month.

LTV (Lifetime Value):

The average net profit from one customer account throughout their engagement.

How to Calculate ARPA

In advanced mode, consider additional parameters:

# of Customers:

The total number of users.

MRR (Monthly Recurring Revenue):

The total predictable revenue stream, calculated by adding payments from all customers.

Account Expansion: A value simulating an increase in ARPA, indicating additional monthly payments.

Customer Lifetime Value Formula

The SaaS LTV calculator employs the formula:


Using the LTV Calculator: An Example

Let’s walk through an example:

  1. Number of Customers: Assume you have 25 customers.
  2. MRR Calculation: Total monthly revenue is $6,000.
  3. ARPA Calculation: Automatically derived from MRR and customer count, in this case, $250.
  4. Gross Margin: Deducting 35% for maintenance costs, the gross margin is 65%.
  5. Churn Rate: If one of 25 customers cancels, the churn rate is 4%.
  6. Account Expansion: Assume it’s $0 for no expansion.
  7. The LTV calculator yields $4,062.50 as the LTV for each customer.

Understanding and utilizing the SaaS LTV calculator empowers businesses to make informed decisions regarding customer engagement and revenue strategies.

This guide ensures you navigate the world of ROAS effectively, helping your business thrive in the digital advertising landscape.