KKPI Formulas
SaaS KPI Formula

LTV Formula

LTV, or customer lifetime value, estimates the total gross profit expected from a customer relationship.

Use the calculator Browse SaaS KPIs
Affiliate resources

Ideas for You

Useful learning resources related to this page. As an Amazon Associate, this site may earn from qualifying purchases at no extra cost to you.

LTV books Books that help you understand LTV and related business metrics more deeply. Explore resources → LTV audiobooks Audiobook searches for learning LTV while commuting, walking, or working. Explore resources → Startup metrics resources Excel-focused resources for building KPI trackers and dashboard workflows. Explore resources → Subscription business resources Practical resources for turning LTV into reports, dashboards, and business decisions. Explore resources →

Simple formula

ARPU × Gross Margin / Churn Rate

The formula uses these inputs:

  • ARPU: enter your value in the calculator or spreadsheet.
  • Gross Margin: enter your value in the calculator or spreadsheet.
  • Churn Rate: enter your value in the calculator or spreadsheet.

Excel formula

Use this Excel formula as a starting point. Replace the sample cell references with the cells in your worksheet.

=IFERROR((B2*C2)/D2,0)

Google Sheets formula

In most cases, the Google Sheets version uses the same structure as Excel.

=IFERROR((B2*C2)/D2,0)

Power BI DAX measure

Use this DAX pattern as a starting point and rename measures or columns to match your Power BI model.

LTV =
DIVIDE([ARPU] * [Gross Margin], [Churn Rate])

SQL example

This generic SQL pattern can be adapted to your warehouse table names and column names.

SELECT
    /* replace with your formula */ AS ltv
FROM kpi_data;

LTV calculator

Result—

How to interpret LTV

Use this KPI with trend data, targets, and related metrics. A single value is less useful than a consistent definition tracked over time.

Important: KPI definitions can vary by company, accounting policy, analytics platform, or reporting standard. Keep the definition consistent when comparing periods.

Common mistakes

  • Mixing different time periods in the numerator and denominator.
  • Using totals that do not match the KPI definition used by your company.
  • Comparing results across teams or industries without context.

Related KPI formulas

Frequently asked questions

What is the LTV formula?

The common LTV formula is: ARPU × Gross Margin / Churn Rate.

How do you calculate LTV in Excel?

Use this Excel formula pattern: =IFERROR((B2*C2)/D2,0). Replace the cell references with your own data.

Can this KPI be calculated in Power BI?

Yes. Use the DAX measure on this page as a starting point and adjust table and column names to match your model.