Customer lifetime value (LTV)

The profit a customer relationship produces over its full duration: lifetime revenue less the recurring cost of serving them. Acquisition cost and product development are excluded (sunk); hosting, support, and payment processing are in.

LTV = Lifetime Revenue x Gross Margin

LTV is a projection built on historical cohort behaviour, so treat it as an estimate: front-loaded onboarding costs or back-weighted infrastructure costs skew it, and new cohorts do not owe the old ones anything.