Lifetime Value (LTV)(Lifetime Value)

The estimated total revenue — or, in stricter definitions, total gross profit — a single customer generates over the full course of the relationship (often abbreviated CLV or LTV). For subscription businesses it is commonly approximated as ARPU × average tenure.

The LTV : CAC ratio is the canonical health metric, with 3× treated as a rule-of-thumb floor for SaaS. Once the ratio drops below 1×, every new acquisition deepens the loss.