Customer Lifetime Value (LTV)

LTV is a forecast wearing a metric’s name. Unlike revenue or churn, it isn’t observed from closed periods: it’s projected from an assumed churn rate and average margin, extrapolated forward. Until enough cohorts have actually lived out a full lifetime, the number is only as good as that assumption.

That’s why LTV is usually paired with acquisition cost rather than reported alone. See LTV:CAC ratio for how the two are meant to be read together.