In one line
A cohort is a group of users who started at the same time — typically installed or signed up on the same day or week.
Why you need it
Total active users can look like they're growing just because new users keep arriving, even while every cohort is quietly churning. Splitting users into cohorts and tracking each one over time reveals whether the product is actually holding on to people.
Where it's used
- Channel evaluation: does a cheap channel also bring good retention?
- LTV estimation: cumulative revenue curves per cohort are the basis of LTV modeling.
Go deeper
How to read cohort retention curves in practice is covered in Cohort Analysis.