How this calculator works
Subscription app LTV is calculated in three steps: blended monthly revenue after store fees, lifetime months (1 divided by monthly churn), then revenue multiplied by lifetime. The calculator then works backward to show maximum sustainable CPI, payback period and LTV to customer acquisition cost.
blended monthly revenue = (monthly_price x (1 - annual_share)) + (annual_price x annual_share)
net revenue per payer = blended monthly x (1 - store fee %)
expected lifetime (months) = 1 / monthly churn rate
LTV per paying user = net revenue per payer x lifetime months
LTV per install = LTV per payer x trial-to-paid % x install-to-trial %
max CPI = LTV per install
LTV to CAC = LTV per install / CPI
payback period = CPI / (net revenue per payer x install-to-payer %)
The formula assumes revenue is evenly distributed across months, which is reasonable for mature subscription cohorts but not for trial-heavy early-stage apps where most conversion happens in month one or two. If your trial-to-paid rate is high, your actual payback is faster than this number.
A worked example
A fitness subscription app: $9.99 monthly, $99 annual (20% of users pick annual), 15% trial-to-paid, 5% monthly churn, 30% app store fee:
- Blended revenue = $9.99 x 0.8 + $99 x 0.2 = $27.98 per user per month (blended)
- After store fees = $27.98 x 0.7 = $19.59
- Lifetime = 1 / 0.05 = 20 months
- LTV per payer = $19.59 x 20 = $391.80
- At 60% install-to-trial and 15% trial-to-paid = 9% install-to-payer
- LTV per install = $391.80 x 0.09 = $35.26
- If CPI is $1, LTV to CAC = 35x (very strong)
- Payback at $1 CPI = 1 / ($19.59 x 0.09) = about 0.6 months
At this unit economics, the app can afford to pay up to $35 per install and still break even on paid acquisition. Reality: most fitness apps see CPI well below $1, especially on organic installs, so paid growth at small scale works. At 100,000 installs a day, CPI rises to $2 to $5 depending on platform.
What goes into LTV: the real numbers
The calculator assumes:
- Store fees are consistent. Apple Small Business Program charges 15% in year one then 15% year two plus (no 30% fee tier for SBP). Google charges 15% on the first $1M in revenue per calendar year, then 15% above that. This tool uses a single rate; recalculate when you cross $1M.
- Annual payers are real repeat revenue. A user who pays $99 at the start of year one and cancels does not return $99 x 1/churn to LTV. The formula accounts for this by using blended average revenue, not separate calculations for each cohort.
- Churn is stable month to month. In reality, churn often spikes after free trial periods end. Day 0-7 churn and month 1-2 churn are typically higher than month 3+ churn. If your trial-to-paid is 15% but trial users churn at 40% by day 7, your true month-one churn is higher than the steady-state 5% you entered.
What actually drives payback and LTV in subscription apps
Three numbers move the needle on LTV more than anything else:
- Trial-to-paid rate. A 1% improvement here (from 12% to 13%) moves LTV per install from $42 to $46 in the example above. That is a 10% gain with no change to churn or price. Run A/B tests on trial length (7 vs 14 vs 30 days) and gatekeeping (free tier vs trial wall).
- Monthly churn. Cutting churn from 5% to 4% extends lifetime from 20 months to 25 months (25% longer LTV) and payback from 0.6 months to 0.5 months. Retention improvements cascade across all downstream metrics.
- Blended price. The mix between monthly and annual users matters. Pushing annual adoption from 20% to 30% increases blended revenue by about 8% (from $27.98 to $30.26 in the example). But aggressive annual pricing can depress trial-to-paid if users feel locked in.
The paradox: LTV is often highest for apps with modest churn rates, not lowest prices. A $19.99 monthly subscription with 3% churn outproduces a $4.99 plan with 8% churn on LTV per install, even though the cheaper plan scales to more users.
When LTV to CAC is not 3x, what to fix
LTV to CAC under 3x signals a specific bottleneck. Diagnosis:
- LTV is too low. Your price is too low relative to churn (churn cuts lifetime more than price increases it). Compare against category benchmarks: fintech averages 15% to 25% day-30 retention (5% to 7% monthly churn); health apps 6% to 8% day-30 (8% to 12% monthly churn). If you are above the category churn rate, focus on retention first.
- CAC is too high. Your CPI or install-to-trial rate is the constraint. If CPI is unavoidable (paid channels are saturated), improve install-to-trial by removing friction in app store listing or onboarding.
- Trial-to-paid is too low. A 8% trial-to-paid when peer apps see 12% means your onboarding is leaking money. Audit the onboarding funnel for drop-off points: forced email entry, unclear value prop, paywalls that appear too early.
Questions people ask
What is a good LTV to CAC ratio for a subscription app?
3x is the minimum breakeven rule for paid acquisition. Below 3x the margin is too thin and any change in CAC, churn or trial-to-paid breaks the model. Top-performing subscription apps run 5x to 10x LTV to CAC, which gives room to scale spend and absorb market changes.
How do I reduce churn when most users churn in the first month?
Most subscription churn is concentrated in the trial-to-paid conversion and the first 30 days post-conversion. Start there: measure day-3, day-7 and day-30 churn separately so you know whether the problem is onboarding, trial gatekeeping or post-purchase value. Behavioral triggers (re-engagement pushes at day 2) and personalization (show feature X if the user looked at feature X in the trial) typically cut early churn by 20% to 30%.
Should I offer a discounted annual plan?
Annual plans usually convert at a lower trial-to-paid rate (users feel locked in) but produce much higher LTV per payer because they lock in revenue. The net depends on your numbers, but most profitable apps offer both with a 20% to 30% annual discount. Test the discount depth; a 20% discount often converts better than 40% and gives you more revenue.
How do app store fees affect LTV?
Dramatically. The difference between 15% (Apple Small Business Program) and 30% (standard) is a 17.6% reduction in net revenue. On a $27.98 blended monthly revenue, 15% fees leave you $23.78 vs $19.59 at 30%. Over a 20-month lifetime that is $85.80 more LTV per payer. Qualify for Apple Small Business Program if you can.
What if my install-to-trial rate is very low?
You are missing growth potential before conversion. A 40% install-to-trial rate instead of 60% cuts LTV per install by 33% (from $35 to $23 in the example above). Audit your app store listing (icon, screenshots, description clarity) and onboarding friction (email requirement on screen one, login walls). Most apps improve install-to-trial 10 to 20 percentage points through listing optimization and onboarding testing.
Should I adjust LTV for acquisition channel?
Yes. Organic installs usually have higher trial-to-paid rates and lower churn than paid installs from ads. If organic trials convert at 20% and paid at 10%, calculate LTV per install separately for each channel; your paid channel LTV might be half the organic channel. This is why ASO (organic optimization) is often more profitable than paid user acquisition at scale.
Sources
Last reviewed 11 September 2026. Formulas and benchmarks are published on the page so you can check them. This tool gives estimates, not quotes.
