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Lifetime Value (LTV) is the cumulative Gross Profit, net of CAC, generated by a cohort (a set of customers grouped by sign-up period) over time. Because LTV is a cohorted metric,

Month 12 LTV = cumulative gross

In the case where:

- A cohort is the set of customers who had revenue for the first time in month n (e.g., Jan 2021)
- y is the number of months since month n (e.g., n = January 2021, y = Month 3 or April 2021)
- See Gross Margin definition.

Example where n = Jan 2021 and y = 3:

For quarterly and annual aggregations, revenue, S&M, and COGS are summed for all months in the period, and S&M from period n is used.

LTV can also be looked at on a Gross Revenue basis. This is appropriate for early stage companies with low gross margins with a high certainly of improving over time.

In the case where:

- A cohort is the set of customers who had revenue for the first time in month n (e.g., Jan 2021)
- Month y is the number of months since month n (e.g., n = January 2021, y = Month 3 or April 2021)

Example where n = Jan 2021 and y = 3:

For quarterly and annual aggregations, revenue, S&M, and COGS are summed for all months in the period, and inputted S&M from period n is used.