Customer Lifetime Value LTV
The total profit you expect to earn from an average customer over the whole time they stay with you.
The fork, why two teams get different numbers
At least four live formulas, and they are not close. (1) REVENUE vs GROSS-MARGIN: LTV on revenue (ARPA / churn) ignores cost to serve; the defensible version multiplies by gross margin %. (2) LIFETIME MODEL: 1 / churn-rate (a geometric-lifetime shortcut) vs an explicit discounted cash flow that also credits expansion. (3) WHICH CHURN: revenue churn (accounts for expansion, can push lifetime very high) vs logo churn (count-based, more conservative). (4) DISCOUNTING: undiscounted vs a DCF with a discount rate. Growth teams quote the revenue, undiscounted, 1/logo-churn version because it is biggest; finance uses gross-margin, revenue-churn or DCF.
The trap
1/churn detonates as churn approaches zero.
- The full trap, worked on a real export
- Every formula variant, spelled out
- The reconciliation anchor, what to tie it to and when to refuse
Reference: SaaS operating-metric convention (no single standards body)