What it is
LTV estimates expected gross profit from a customer relationship. It depends on retention, expansion, margin, and discount rate assumptions — which must be stated.
How it’s calculated
Common simple form: gross margin × ARPU × lifetime (or 1 ÷ churn). Better models use cohort retention and expansion paths aligned to NRR/GRR.
Where it breaks
LTV breaks when churn is blended across wildly different segments, when expansion is double-counted, or when LTV:CAC compares different time bases.
In the board pack
Show LTV with inputs, next to CAC and retention metrics. No naked LTV:CAC ratio.
Keep the written definition stable across close, the board pack, and diligence so the same word never means two math models.
When this metric moves, point to the source schedule and the bridge components — not a screenshot from a private workbook.