Definition
Lifetime Value (LTV)
LTV estimates the total revenue a user will generate throughout their relationship with your app. It's the key metric for determining how much you can spend to acquire users profitably.
Lifetime Value (LTV) projects how much revenue a user will generate from install to churn. It's the ceiling for your cost per acquisition — spending more than LTV to acquire a user means losing money.
LTV depends on monetization rate, average revenue per paying user, and retention curve. Improving any of these factors increases LTV and lets you spend more on user acquisition while remaining profitable.
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Related Terms
ARPU (Average Revenue Per User)
ARPU measures the average revenue generated per active user over a specific period. It helps evaluate monetization efficiency and guides pricing and feature decisions.
Churn Rate
Churn rate is the percentage of users who stop using your app over a given period. Lower churn means higher retention, better LTV, and more sustainable growth.
Retention Rate
Retention rate measures the percentage of users who continue using your app after a specific period (Day 1, Day 7, Day 30). It's a key indicator of product-market fit.
Further Reading
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