What is LTV (lifetime value)?
LTV, short for lifetime value and sometimes written as customer lifetime value or CLV, is the total revenue you expect from an average user across the entire time they use your app. For a subscription app it depends heavily on how long users keep paying, so retention and churn feed directly into it.
How LTV is calculated
The idea is to estimate how much an average user pays over their whole relationship with the app. For subscriptions, a common shortcut is average revenue per user divided by churn rate. If a user pays 10 dollars a month and monthly churn is 5 percent, the average user stays about 20 months, implying roughly 200 dollars of lifetime value. More careful models adjust for the platform commission Apple takes, refunds, and the fact that churn often differs between new and long-tenured users. The exact formula matters less than using one consistently so you can compare segments and track changes over time.
Why LTV matters for an app business
LTV sets the budget for acquiring a user. If a customer is worth 50 dollars over their lifetime, you cannot sustainably pay 60 dollars to acquire them. Teams compare LTV against customer acquisition cost, often as an LTV to CAC ratio, to judge whether spending on growth is profitable. LTV also guides pricing and product decisions: anything that keeps users subscribed longer, or raises what they pay, increases it. Because subscriptions compound over time, small improvements in retention can move LTV substantially.
Tracking LTV, and how AppFlight fits
LTV is an estimate built from real inputs: revenue, retention, and churn, which is why subscription tools compute and report it. AppFlight builds native Swift and SwiftUI apps and includes a command center for analytics and revenue, and when an app uses an integration like RevenueCat, subscription metrics that feed LTV can surface there. Keep in mind that Apple takes a commission on App Store sales, so the net LTV you keep is lower than the gross figure.
FAQ
How is LTV calculated?
A common subscription estimate is average revenue per user divided by churn rate, which approximates how much an average user pays before they leave. For example, 10 dollars per month at 5 percent monthly churn implies roughly 200 dollars of LTV. Real models also account for Apple commission and refunds.
Why does LTV matter?
LTV sets the ceiling on what you can afford to spend acquiring a user. If a user is worth 50 dollars over their lifetime, paying 60 dollars to acquire them loses money. Comparing LTV to customer acquisition cost is a basic test of whether growth is sustainable.
What is the difference between LTV and ARPU?
ARPU, average revenue per user, is revenue over a fixed window, often per month. LTV projects total revenue across the whole relationship. ARPU is an input to LTV, combined with how long users are retained.