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Free LTV:CAC Ratio Calculator

Calculate your customer lifetime value (LTV), customer acquisition cost (CAC), and the critical LTV:CAC ratio. Understand whether your customer acquisition efforts are sustainable and profitable.

LTV:CAC Calculator

LTV & CAC Analysis
Customer Lifetime0 months
LTV (per customer)$0.00
CAC (per customer)$0.00
LTV:CAC Ratio0.00
Total LTV (all customers)$0.00
Total CAC Spent$0.00
Payback Period0 months

How to Use

This LTV:CAC ratio calculator helps you evaluate the efficiency of your customer acquisition strategy. Start by entering your average revenue per user per month (ARPU) and your gross margin — the percentage of revenue you keep after direct costs like hosting and payment processing.

Enter your monthly churn rate to automatically calculate customer lifetime (1 divided by churn rate). Then provide your customer acquisition cost and the number of customers acquired to see total figures.

The results show your LTV:CAC ratio (aim for at least 3:1), the payback period (how long it takes to recover your acquisition costs), and total values across all customers.

What Is a Good LTV:CAC Ratio?

  • Below 1:1 — Unsustainable. You spend more to acquire a customer than they generate in profit.
  • 1:1 to 3:1 — Breaking even or minimally profitable. Work on reducing churn or CAC.
  • 3:1 to 5:1 — Good. This is the benchmark for healthy SaaS businesses.
  • Above 5:1 — Excellent. Strong unit economics. Consider investing more in growth.

LTV:CAC Formulas

Customer Lifetime = 1 / (Churn Rate / 100) months
LTV = ARPU × Gross Margin% × Lifetime
CAC = Given value (total marketing & sales spend / customers acquired)
LTV:CAC Ratio = LTV / CAC
Payback Period = CAC / (ARPU × Gross Margin%) months
Total LTV = LTV × Number of Customers
Total CAC = CAC × Number of Customers

Frequently Asked Questions

A good LTV:CAC ratio is above 3:1. A ratio of 1:1 means you break even on each customer. Below 1:1 means you lose money on every customer you acquire. Industry benchmarks: 3:1 is considered good, 5:1 is excellent, and above 10:1 suggests you may be under-investing in growth.
A healthy payback period is under 12 months for most SaaS businesses. For high-value enterprise SaaS, 12-18 months is acceptable. For low-cost consumer SaaS, under 6 months is ideal.
To lower your CAC, focus on content marketing and SEO for organic traffic, improve your website conversion rate, optimize ad campaigns, implement referral programs, and reduce sales cycle friction.
To increase LTV, reduce churn by improving your product and customer support, implement expansion revenue through upsells and cross-sells, introduce annual plans, and consider price optimization. Even a small reduction in churn can significantly boost LTV.