Business calculator

LTV:CAC Calculator

Calculate customer lifetime value, customer acquisition cost, the LTV:CAC ratio, CAC payback period, and your maximum sustainable CAC — for SaaS, ecommerce, subscription, DTC, marketplace, and app businesses. The ratio tells you whether acquisition creates value; the payback tells you whether you can afford it. This tool computes both honestly: gross-profit LTV (not revenue), fully loaded CAC, discounted LTV, per-channel decisions, and the sensitivity of all of it to churn, pricing, and rising ad costs.

Transparent assumptions Transparent formulas 4 modes incl. channels & NPV LTV 12 currencies + custom symbol 13-sheet XLSX workbook Practical interpretation
Check my unit economics See the formulas

LTV assumes churn behaves like the recent past.

LTV:CAC = gross-profit lifetime value ÷ customer acquisition cost. A customer paying $50/month at a 70% gross margin with 5% monthly churn is worth $50 × 0.70 × 20 months = $700; acquired for $200 (from $50,000 of spend and 250 customers), the ratio is 3.5 : 1 with a 5.7-month CAC payback. Below 1 : 1, acquisition loses money — and a healthy ratio can still hide a cash problem if the payback is slow.

Calculator

Presets:

Simple

$

Everything spent to acquire customers in the period — ads, salaries, tools, agencies.

In the same period as the spend.

$
%

Revenue left after the cost of serving the customer.

%

Share of customers who leave each month. Lifetime = 1 ÷ churn.

Targets (drive the sustainable-CAC ceiling)· 3 : 1 · 12 mo

3 : 1 is a common starting point — not a law.

$

Your inputs auto-save in this browser. The share link encodes them in the URL — nothing is sent to a server.

Results · per customer

Generally healthy

LTV:CAC ratio

3.5 : 1

Gross-profit LTV ÷ CAC.

CAC payback

5.7 mo

Strong

CAC

$200.00

Fully loaded spend ÷ new customers.

Gross-profit LTV

$700

Monthly gross profit × lifetime.

Customer lifetime

20 mo

1 ÷ monthly churn.

Net LTV after CAC

$500

Strong positive — reinvestable

Monthly gross profit / customer

$35.00

$50.00 ARPU × 70% margin.

Max sustainable CAC

$200.00

Binding ceiling across your ratio, payback, and profit targets.

Estimate only — not accounting, tax, legal, investment, or financial advice. LTV assumes churn behaves like the recent past.

13 sheets generated from your inputs with live formulas: a summary dashboard, the full SaaS and ecommerce models, a 12-row channel analysis, scenarios, churn/CAC/revenue sensitivity, and a 36-month payback timeline.

What to improve first

Each lever applies a comparable, realistic move to YOUR numbers and re-computes the ratio (currently 3.5 : 1). Ranked by impact.

  1. 1

    Reduce churn

    If you cut churn by 20% (relative):

    4.38 : 1

    +0.88

  2. 2

    Lower CAC

    If you cut acquisition cost 10%:

    3.89 : 1

    +0.39

  3. 3

    Increase ARPU / pricing

    If you lift revenue per customer 10%:

    3.85 : 1

    +0.35

  4. 4

    Improve gross margin

    If you add 5 margin points:

    3.75 : 1

    +0.25

Churn is usually the highest-leverage fix because lifetime is 1 ÷ churn — retention work compounds. The moves are standardized for comparability; your real options may be bigger or smaller.

Payback timeline

Cumulative gross profit per customer vs the $200 CAC over 36 months — capped at the average lifetime, beyond which the average customer has churned.

CAC $200Payback · month 6Month 1Month 36

The CAC is recovered in month 6. Every month before that is acquisition cash you cannot reuse — scaling spend multiplies the locked-up amount.

Show the month-by-month table
Cumulative gross profit by month vs CAC
MonthCumulative gross profitCAC remainingBreak-even?
1$35$165No
2$70$130No
3$105$95No
4$140$60No
5$175$25No
6$210$0Yes
7$245$0Yes
8$280$0Yes
9$315$0Yes
10$350$0Yes
11$385$0Yes
12$420$0Yes
13$455$0Yes
14$490$0Yes
15$525$0Yes
16$560$0Yes
17$595$0Yes
18$630$0Yes
19$665$0Yes
20$700$0Yes
21$700$0Yes
22$700$0Yes
23$700$0Yes
24$700$0Yes
25$700$0Yes
26$700$0Yes
27$700$0Yes
28$700$0Yes
29$700$0Yes
30$700$0Yes
31$700$0Yes
32$700$0Yes
33$700$0Yes
34$700$0Yes
35$700$0Yes
36$700$0Yes

Hitting your targets

What it takes to reach a 3 : 1 ratio, a 12-month payback, and $500.00 net profit per customer — edit the targets in the inputs panel.

Sustainable CAC ceiling

$200.00

Current CAC $200.00 fits under it.

Max CAC for the ratio target

$233.33

Gross-profit LTV ÷ target ratio.

Max CAC for the payback target

$420.00

Monthly gross profit × target months.

Max CAC for the profit target

$200.00

Gross-profit LTV − target profit.

Required changes to hit the target ratio at the current CAC
To hit the target with…Required valueYou have
…a higher ARPU (everything else fixed)$42.86/mo$50.00/mo
…a better gross margin60%70%
…lower churn≤ 5.8%/mo5%/mo
…ARPU for the payback target$23.81/mo$50.00/mo

Sensitivity analysis

How the ratio, payback, and net LTV move when the three big assumptions move. The highlighted row is your current input.

Churn sensitivity· ±50%
LTV:CAC by churn rate
ChurnLifetimeGross-profit LTVLTV:CACPaybackNet LTV
−50% (2.5%)40 mo$1,4007 : 15.7 mo$1,200
−25% (3.8%)26.7 mo$9334.67 : 15.7 mo$733
Current churn (5%)20 mo$7003.5 : 15.7 mo$500
+25% (6.3%)16 mo$5602.8 : 15.7 mo$360
+50% (7.5%)13.3 mo$4672.33 : 15.7 mo$267

Lifetime is 1 ÷ churn, so LTV moves inversely and non-linearly — halving churn doubles LTV. Payback stays put because it runs on monthly gross profit.

CAC sensitivity· −20% to +100%
LTV:CAC by acquisition cost
CACLTV:CACPaybackNet LTV
−20% ($160)4.38 : 14.6 mo$540
Current CAC ($200)3.5 : 15.7 mo$500
+20% ($240)2.92 : 16.9 mo$460
+50% ($300)2.33 : 18.6 mo$400
+100% ($400)1.75 : 111.4 mo$300

CAC usually rises as you scale — audiences saturate and auctions get pricier. Plan against +50%, not today's number.

ARPU sensitivity· ±20%
LTV:CAC by revenue per customer
ARPUGross-profit LTVLTV:CACPaybackNet LTV
−20% ($40)$5602.8 : 17.1 mo$360
−10% ($45)$6303.15 : 16.3 mo$430
Current ($50)$7003.5 : 15.7 mo$500
+10% ($55)$7703.85 : 15.2 mo$570
+20% ($60)$8404.2 : 14.8 mo$640

Pricing moves LTV and payback together — often the fastest fix when churn is already low.

Scenario comparison

Current, optimized, and aggressive-growth cases on the same unit economics. Edit the tweaks below — churn and margin move in percentage points, the rest in percent.

Scenario comparison table
ScenarioARPUMarginChurnCACLTVLTV:CACPaybackNet LTVCohort value
Current$5070%5%$200$7003.5 : 15.7 mo$500$125,000
Optimized$5573%4%$180$1,0045.58 : 14.5 mo$824$205,938
Aggressive growth$5070%5.5%$250$6362.55 : 17.1 mo$386$173,864

Optimized wins on both the ratio and payback speed — the rare case where the best-LTV plan is also the cash-safest one.

Optimized scenario tweaks· -1pp churn · -10% CAC
ARPU %
Margin pp
Churn pp
CAC %
Customers %
Aggressive growth tweaks· +80% customers · +25% CAC
ARPU %
Margin pp
Churn pp
CAC %
Customers %

Aggressive growth usually RAISES CAC (auction saturation) and can nudge churn up (lower-intent customers) — the defaults reflect that. Cohort value = net LTV × customers acquired.

At a glance

Formula shown
LTV:CAC = gross-profit LTV ÷ CAC, with CAC payback = CAC ÷ monthly gross profit.
Scenario support
Four modes — Simple, SaaS, Ecommerce, Channels — with NPV LTV, scenarios, and churn/CAC/ARPU sensitivity.
Workbook export
13-sheet Excel (XLSX) export
Educational estimate
Planning support from the values you enter — not professional advice.

How to read your result

The ratio only means something when you're honest about what feeds it. Use gross-profit LTV, not revenue LTV — revenue ignores what it costs to serve a customer, so a healthy-looking 3 : 1 revenue ratio can be closer to 1 : 1 once margin is applied. Pair the ratio with CAC payback: a 4 : 1 ratio with a 4-month payback and a 4 : 1 ratio with a 22-month payback are different businesses, since payback is the one number here with a clock in it — a high ratio can still mean a cash-poor business if repayment takes too long. And if you spend across channels, segment CAC rather than reading the blended figure: cheap organic customers can hide a loss-making paid channel inside a comfortable-looking average — switch to Channels mode to see each one separately.

The formulas

CAC

CAC = Sales & marketing spend ÷ New customers

Fully loaded: ads, salaries, tools, agencies, content, promos.

Gross-profit LTV

LTV = ARPU × Gross margin × Lifetime

Lifetime (months) = 1 ÷ monthly churn.

LTV:CAC ratio

Ratio = Gross-profit LTV ÷ CAC

Below 1 : 1, acquisition destroys value.

CAC payback

Payback (months) = CAC ÷ Monthly gross profit

The cash-timing number the ratio alone doesn't show.

Worked example

$50,000 of sales & marketing spend acquires 250 customers → CAC = $200.

A $50 ARPU customer at a 70% gross margin generates $35 of monthly gross profit; at 5% monthly churn the average lifetime is 20 months, so gross-profit LTV = 50 × 0.70 × 20 = $700 (the revenue-only figure would overstate this at $1,000).

Ratio = 700 ÷ 200 = 3.5 : 1 — generally healthy. Payback = 200 ÷ 35 ≈ 5.7 months, and net LTV after CAC is $500. At a 3 : 1 target ratio, the maximum sustainable CAC would be $233.

Assumptions

  • Customer lifetime uses the geometric-survival average (1 ÷ churn) and assumes the churn rate holds; the manual-lifetime option exists precisely for when it does not.
  • CAC payback assumes the customer survives through the payback window — the calculator flags the case where the average customer churns first.
  • The expansion/contraction adjustment is static (ARPU × (1 + e − c)), deliberately more conservative than compounding net revenue retention.
  • The ecommerce model treats refunds as removing the full margin of refunded orders while fees, shipping, and discounts are still paid on every order shipped.
  • Percentages are 0–100 inputs and are clamped; impossible quantities render as “Not possible” or “Not meaningful”, never as infinity.
  • The four modes are independent models sharing identities, not one merged dataset — each exports its own inputs to the workbook.

Limitations

  • This is an educational planning estimate, not bookkeeping — it does not replace your accounting records, CRM, or professional advice.
  • LTV is a forecast wearing a formula: churn drift, pricing changes, and cohort mix all move it. Re-estimate from real cohorts regularly.
  • CAC inputs are only as honest as what you include — salaries, tools, agencies, and creative belong in the numerator.
  • Attribution is imperfect: channel-level CAC inherits every attribution problem your analytics has.
  • No benchmark here is an industry standard — every threshold is a planning band, and your margin structure decides what “good” means.

This is a planning estimate, not bookkeeping. For ad-spend profitability floors see the break-even ROAS calculator; for the full order-level cost stack see the ecommerce profit calculator; for volume break-even see the break-even calculator.

Frequently asked questions

What is the LTV:CAC ratio and why does it matter?

It compares the lifetime gross profit of a customer with the cost of acquiring them. It answers the most basic growth question: does a dollar of acquisition spend create more than a dollar of value? Below 1 : 1, growth destroys money; the higher above it, the more efficiently acquisition compounds.

How do I calculate CAC correctly?

Divide your fully loaded sales and marketing spend by new customers acquired in the same period. Fully loaded means ads, salaries and commissions, tools, agencies, creative, and acquisition discounts. If customers take months to convert (a long sales cycle), align the spend window with the cohort it actually produced.

How is customer lifetime calculated from churn?

Average lifetime = 1 ÷ monthly churn rate. At 5% monthly churn, the average customer stays 20 months. This is a geometric-survival average: many customers leave earlier, a few stay much longer. If churn is 0 or your cohorts are too young to measure it, use a manual lifetime estimate instead — the SaaS mode supports both.

What is a good LTV:CAC ratio for SaaS?

The folk benchmark is 3 : 1 or better, with CAC payback under about 12 months. But the honest answer depends on gross margin, cash position, and growth stage. The calculator bands: below 1 losing money, 1–2 weak, 2–3 thin, 3–5 generally healthy, above 5 very efficient (check the CAC is fully loaded and that you are not under-investing in growth).

Why is my ratio high but my business still cash-poor?

Because the ratio has no clock. A 5 : 1 ratio with a 20-month payback means every new customer locks up acquisition cash for 20 months before turning profitable — scale that and the locked-up balance grows faster than the profit. Check the payback timeline section and your runway before raising budgets.

Related calculators

This page answers “is acquisition worth it?” — these tools take the neighbouring questions:

  • Break-Even ROAS CalculatorWork out break-even and target ROAS from your real margins, plus max CAC, break-even MER, and ad budgets.
  • Ecommerce Profit CalculatorSee net profit per order after product costs, fees, shipping, ads, and returns, with break-even price and ROAS.
  • Profit Margin CalculatorWork out gross, contribution, operating, and net margin, with target pricing, break-even, scenarios, and SKU comparison.
  • Break-Even CalculatorFind units and revenue break-even, contribution margin, target profit, and margin of safety, with sensitivity tables and a chart.
  • Markup CalculatorPrice from cost across nine modes — markup, target margin, reverse cost ceilings, and ecommerce landed cost after fees.

Read the guides

There is no dedicated LTV:CAC guide yet. For the ecommerce cost-stack math that feeds this calculator's Ecommerce/DTC mode — fees, shipping, ads, and returns — see Ecommerce Profit: Fees, Shipping, Ads, Returns, and Real Margin.

If ad spend is what's driving acquisition cost, see Break-Even ROAS Explained for Small Business Advertising.

Business planning disclaimer

This LTV:CAC calculator and its XLSX workbook are for educational planning only. They do not predict actual customer behaviour, investment returns, profitability, cash flow, tax treatment, or business success. Churn-based lifetimes assume the future behaves like the recent past; expansion and repeat-purchase assumptions carry real uncertainty; CAC usually rises as you scale. This is not accounting, tax, legal, investment, or financial advice — validate every assumption against your own accounting records, CRM, ad platforms, and analytics, and consult professional advisors before major decisions.

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Authorship & verification

Written and maintained by

  • Formula and examples verified on 14 June 2026
  • Educational estimate only

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