Amortization Chart Calculator

SaaS Churn & Customer Lifetime Value (LTV) Calculator

Calculation Results

Monthly Churn Rate

Customer Lifespan

Customer Lifetime Value (LTV)

Revenue Churn Potential

function calculateSaaSMetrics() { var start = parseFloat(document.getElementById('startCustomers').value); var lost = parseFloat(document.getElementById('lostCustomers').value); var revenue = parseFloat(document.getElementById('arpu').value); var margin = parseFloat(document.getElementById('grossMargin').value) / 100; if (isNaN(start) || isNaN(lost) || isNaN(revenue) || isNaN(margin) || start <= 0) { alert("Please enter valid positive numbers for all fields."); return; } var churnRate = (lost / start); var lifespan = 1 / churnRate; var ltv = (revenue * margin) * lifespan; var revChurn = lost * revenue; document.getElementById('resChurn').innerHTML = (churnRate * 100).toFixed(2) + "%"; document.getElementById('resLifespan').innerHTML = lifespan.toFixed(1) + " Months"; document.getElementById('resLTV').innerHTML = "$" + ltv.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resRevChurn').innerHTML = "$" + revChurn.toLocaleString(); document.getElementById('saas-results').style.display = 'block'; }

Understanding SaaS Churn and LTV Metrics

In the Software as a Service (SaaS) industry, your growth is dictated by two primary levers: how fast you acquire customers and how long you keep them. This calculator helps you visualize the health of your subscription business by measuring Churn Rate and Customer Lifetime Value (LTV).

What is Customer Churn Rate?

Churn rate is the percentage of customers who cancel their subscription over a specific period. It is the silent killer of SaaS companies. If your churn rate is too high, you are effectively filling a "leaky bucket," where new customer acquisition only replaces those leaving rather than driving growth.

How is LTV Calculated?

Customer Lifetime Value (LTV) is the total net profit a business expects to earn from a customer throughout their entire relationship. The formula used in this calculator is:

LTV = (ARPU × Gross Margin) / Churn Rate

Real-World Example

Imagine a project management tool with the following stats:

• Beginning Customers: 2,000
• Lost Customers: 40 (per month)
• ARPU: $50/month
• Gross Margin: 80%

In this scenario, the Churn Rate is 2% (40 / 2,000). The Customer Lifespan is 50 months (1 / 0.02). The LTV would be $2,000 (($50 × 0.80) × 50). This means for every new customer you sign up, you can expect $2,000 in gross profit over their lifetime.

Why Gross Margin Matters

Many simple calculators ignore Gross Margin, but for a true LTV, you must account for the cost of servicing the customer (server costs, support, etc.). A SaaS company with a 90% margin is significantly more valuable than one with a 60% margin, even if their revenue and churn rates are identical.

Strategies to Improve Your Metrics

1. Focus on Onboarding: Most churn happens in the first 30 days. Ensuring customers find "Aha! moments" early increases lifespan.
2. Upsell Existing Users: Increasing your ARPU through expansion revenue can lead to "Negative Churn," where the revenue from existing customers grows faster than the revenue lost from cancellations.
3. Segmentation: Use this calculator for different customer cohorts. You may find that enterprise customers have a lower churn rate and higher LTV compared to small business users.