LTV Calculator
Free customer lifetime value calculator for SaaS: LTV from ARPU, churn and gross margin, plus LTV:CAC ratio and CAC payback, with real indie benchmarks.
- Average customer lifetime
- 20.0 months
- Lifetime revenue per customer
- $580
- LTV (after gross margin)
- $493
- LTV : CAC
- 4.1 : 1
- CAC payback
- 4.9 months
- Verdict
- Healthy: 3:1 or better
The LTV formula
LTV = average revenue per customer per month × gross margin ÷ monthly churn. One divided by churn is the average customer lifetime in months: at 5% monthly churn the average customer stays 20 months. A $29/month plan with 85% gross margin and 5% churn gives an LTV of $29 × 0.85 ÷ 0.05 = $493.
The number only matters next to what it costs to win a customer. An LTV:CAC ratio of 3:1 or better is the usual target. Most bootstrapped makers in this directory keep CAC near zero by growing through SEO, building in public and word of mouth, which is why small, cheap plans can still be very profitable for them.
Churn is the lever with the biggest effect. Halving churn from 6% to 3% doubles LTV, which is why annual plans (paid upfront, churn once a year) are so common among indie SaaS.
Indie SaaS revenue for context
The highest self-reported MRR among active indie products we track.
| Product | Maker | Public figure |
|---|---|---|
| Chatbase | Yasser Elsaid | $864K MRR |
| Revid | Thibault Louis-Lucas (Tibo) | $600K+/mo |
| 1Lookup | Robby Frank | $263K MRR |
| Postiz | Nevo David | $250K MRR |
| Tinkerer Club | Kitze | $223K in 30 days (verified) |
| Photopea | Ivan Kutskir | ~$200K/mo |
| Tally | Filip Minev | $175K MRR (Feb 2025) |
| TypingMind | Tony Dinh | $137K/mo |
| Ministry of Testing | Rosie Sherry | $110K/mo (self-reported on Indie Hackers) |
| Designjoy | Brett Williams | $100K MRR |
| Sales.co | Jakob Greenfeld | $90K/mo (2024) |
| Photo AI | Pieter Levels | $86K/mo |
Frequently asked questions
How do you calculate customer lifetime value?
Multiply average monthly revenue per customer by gross margin, then divide by monthly churn. Example: $29 × 85% ÷ 5% = $493.
What is a good LTV to CAC ratio?
3:1 or higher is the common benchmark. Below 1:1 you lose money on every customer; far above 5:1 can mean you are under-investing in growth.
Should LTV use revenue or gross margin?
Gross margin. Revenue-based LTV overstates value, especially for AI products where API costs can take a large share of each subscription.
What is a normal churn rate for a small SaaS?
Roughly 3–7% per month for B2C and prosumer tools, and 1–2% for B2B products sold to companies. Annual plans lower effective churn.
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- SaaS Valuation Calculator
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