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SaaS Churn Rate & Customer Lifetime Value (CLV) Calculator

Customers (Start of Month)

Customers Lost (During Month)

Avg. Revenue Per User (ARPU) ($)

Gross Margin %

Monthly Churn Rate

0%

Avg. Lifetime (Months)

0

LTV (Net Profit)

$0

Please fill in all fields with valid positive numbers.

function calculateSaaSMetrics() { var start = parseFloat(document.getElementById('startCustomers').value); var lost = parseFloat(document.getElementById('lostCustomers').value); var arpu = parseFloat(document.getElementById('arpu').value); var margin = parseFloat(document.getElementById('grossMargin').value); var resultsArea = document.getElementById('resultsArea'); var errorArea = document.getElementById('errorArea'); if (isNaN(start) || isNaN(lost) || isNaN(arpu) || isNaN(margin) || start <= 0 || lost 0 ? (1 / churnRate) : 0; // 3. Customer Lifetime Value (CLV/LTV) Calculation // LTV = (ARPU * Gross Margin) / Churn Rate var ltv = churnRate > 0 ? ((arpu * (margin / 100)) / churnRate) : 0; document.getElementById('churnResult').innerHTML = churnPercentage.toFixed(2) + '%'; document.getElementById('lifetimeResult').innerHTML = lifetime === 0 ? 'Infinite' : lifetime.toFixed(1); document.getElementById('clvResult').innerHTML = '$' + ltv.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); }

Understanding SaaS Unit Economics: Churn and CLV

In the world of Software as a Service (SaaS), growth is often measured by how quickly you acquire new users. However, sustainable profitability is determined by how well you retain them. This calculator helps you bridge the gap between simple revenue and long-term business health.

What is Churn Rate?

Your Monthly Customer Churn Rate is the percentage of your customer base that cancels their subscription during a given month. It is the single most important metric for any recurring revenue business. Even a small increase in churn can compound over time, making it nearly impossible to scale effectively.

Formula: (Customers Lost / Customers at Start of Period) × 100

What is Customer Lifetime Value (CLV)?

Customer Lifetime Value (often called LTV) represents the total net profit your business expects to earn from a single customer throughout their entire relationship with your brand. By factoring in your Gross Margin, this calculator provides a "Net LTV," which is more accurate for financial planning than Gross LTV.

Knowing your CLV allows you to determine your maximum Customer Acquisition Cost (CAC). A healthy SaaS company typically maintains a CLV:CAC ratio of 3:1 or higher.

Realistic Example Calculation

Imagine a SaaS company with the following metrics:

Starting Customers: 5,000
Monthly Cancellations: 150 (3% Churn)
ARPU: $100 per month
Gross Margin: 85% (Server costs, support, etc.)

Using the calculator, we find the Customer Lifetime is approximately 33.3 months. Because the customer pays $100/month at an 85% margin, the business generates $85 in profit monthly. Over 33.3 months, the total CLV is $2,833.33.

Why Gross Margin Matters

Many generic calculators only look at revenue. However, if your SaaS has high delivery costs (like a video processing tool or an AI platform with high API costs), your revenue isn't your profit. By including Gross Margin, you get a realistic view of how much cash is actually left to spend on marketing and development.