App LTV Calculator
Estimate customer lifetime value from ARPU and churn or average lifetime.
Average customer lifetime
12.5 months
LTV (revenue)
$50.00
LTV (gross profit)
$40.00
What you can actually afford to spend acquiring a user.
LTV = ARPU ÷ monthly churn. Simple but standard; cohort-based models are more precise.
Lifetime value (LTV) is the total revenue you expect from an average user before they leave — the ceiling on what you can profitably spend to acquire them. This calculator supports the two standard estimation routes: LTV = ARPU × average customer lifetime, or the equivalent shortcut LTV = ARPU ÷ churn rate, which works because average lifetime is the reciprocal of churn (5% monthly churn means a 20-month average lifetime).
Enter your monthly ARPU and either a churn rate or a lifetime in months. The result is the expected revenue per user — compare it directly against your CPI or CPA to see whether your acquisition economics work.
How to calculate app LTV
- 1
Enter your monthly ARPU — total monthly revenue divided by active users (use ARPPU and paying churn if you want per-subscriber LTV).
- 2
Enter either your monthly churn rate or an average customer lifetime in months — the calculator derives one from the other (lifetime = 1 ÷ churn).
- 3
Read the LTV: the expected total revenue an average user generates before churning.
- 4
Compare LTV against your blended CPI or CPA — a common health target is LTV of at least 3× acquisition cost.
The LTV formula and where it comes from
The workhorse formula is LTV = ARPU ÷ churn. It follows from a geometric series: if a fraction c of users churns each month, the expected number of months a user stays is 1 ÷ c, so revenue per user is ARPU × (1 ÷ c). A subscription netting $6/month per subscriber with 8% monthly subscriber churn implies a 12.5-month average lifetime and a $75 LTV. The same logic works at any granularity — all users with blended ARPU, or paying users with ARPPU and paying churn.
The formula assumes churn is constant, which real cohorts violate: churn is highest in the first month and flattens for survivors, so a single early-heavy churn rate understates LTV while a mature-cohort rate overstates it. For a quick correction, compute churn from cohorts at least 3 months old, or model LTV as a cumulative revenue curve per cohort — which is what most subscription analytics stacks do under the hood.
Using LTV to set acquisition budgets
LTV’s main job is bounding CPI. The widely used LTV:CAC guideline of 3:1 means an $18 LTV supports roughly a $6 blended acquisition cost — enough headroom to absorb estimation error, payback delay, and overhead. Running near 1:1 means you are buying revenue, not profit; far above 3:1 often means you are underinvesting in growth.
Payback period matters as much as the ratio. An LTV that arrives over 24 months strains cash flow even if the ratio is healthy, which is why many app teams cap acceptable payback at 3–12 months. And always compute LTV on net revenue (after the 15–30% store commission): gross-revenue LTVs quietly inflate your maximum bid by up to 43%.
Frequently asked questions
What is the formula for app LTV?
The simplest reliable formula is LTV = ARPU ÷ churn rate (both measured over the same period), which equals ARPU × average lifetime since lifetime = 1 ÷ churn. Example: $4 monthly ARPU with 10% monthly churn gives a 10-month lifetime and $40 LTV.
Why does 1 ÷ churn equal average lifetime?
If a constant fraction of users leaves each period, retention follows a geometric decay, and the expected number of periods a user survives sums to exactly 1 ÷ churn. At 5% monthly churn, users last 20 months on average; at 20%, just 5 months.
What is a good LTV to CAC ratio?
The standard benchmark is 3:1 — lifetime value roughly three times acquisition cost. Below ~1.5:1 acquisition is likely unprofitable after overhead; above ~4–5:1 you probably have room to spend more aggressively on growth.
Should LTV use gross or net revenue?
Net. Apple and Google take 15–30% commission before proceeds reach you, so an LTV built on gross billings overstates what a user is worth by up to 43%. Compute ARPU from proceeds, or multiply a gross LTV by your effective net rate (0.70–0.85).
How is subscriber LTV different from blended LTV?
Blended LTV uses ARPU across all users and total churn — useful for judging install-level CPI. Subscriber LTV uses ARPPU and paying-subscriber churn — useful for pricing and trial decisions. Don’t mix inputs: ARPPU divided by all-user churn produces a meaningless number.
What monthly churn is typical for subscription apps?
Monthly-plan subscribers commonly churn 5–15% per month depending on category, while annual plans churn far less monthly by construction. Consumer apps sit at the high end, utility and professional tools at the low end. Even a 2-point churn reduction moves LTV dramatically — from $40 to $50 in the 10% to 8% case.
Grow the top of the LTV equation for free
Every organic download raises LTV:CAC because its CAC is zero. Appalize’s keyword tracking and App Store Connect analytics show which keywords deliver those free users — and which to target next.
Related free tools
ARPU Calculator
Calculate average revenue per user — and see how ARPU differs from ARPPU.
Churn Rate Calculator
Calculate subscriber churn and convert between monthly and annual rates correctly.
UA Break-Even Calculator
Compare CPI against LTV to get payback period and your maximum profitable CPI.
Subscription Revenue Calculator
Project net subscription revenue over time with commission and churn decay built in.