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
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About the LTV:CAC Ratio Calculator
The LTV:CAC ratio is the single most important metric for SaaS businesses. It measures how much lifetime value you generate from a customer compared to what you spent acquiring them. This calculator helps founders and investors evaluate unit economics health.
Quick Start Guide
- Enter your values — Fill in the fields with numbers relevant to your ltv:cac ratio calculation. Most fields include sensible defaults.
- Adjust settings — Change options like units, rates, or timeframes to match your specific scenario.
- Review results — The output shows a clear breakdown so you understand how the total was calculated.
How It Works
LTV = ARPU / monthly churn rate. CAC = total sales & marketing cost / number of new customers. Payback period = CAC / (ARPU − cost to serve). A healthy SaaS typically has LTV:CAC > 3:1 and payback period < 12 months.
Real-World Example
Scenario: A SaaS with $50 ARPU and 4% monthly churn
- ARPU: $50/month.
- Gross margin: 80%.
- CAC: $500.
- Monthly churn: 4%.
Who Is This For?
This ltv:cac ratio calculator is designed for SaaS founders, product managers, and growth teams analyzing unit economics and subscription metrics.. It's intentionally simple — no complex signup forms, no data tracking, no distractions. Just enter your numbers and get the answer.
Pro Tip
Share these metrics with your team regularly — alignment on unit economics drives better product and pricing decisions.
Things to Know
The ltv:cac ratio calculator provides instant, accurate results based on standard formulas and the values you enter. Whether you are planning a financial decision, tracking a health metric, or solving a practical problem, this tool gives you the numbers you need without requiring signup or account creation.
How to get the best results: Use accurate, up-to-date inputs for the most reliable calculations. When planning ahead, run multiple scenarios with different assumptions to understand the range of possible outcomes.
Note: This tool is designed for educational and planning purposes. For critical financial, medical, or legal decisions, always verify the results with a qualified professional who can evaluate your specific circumstances.
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Frequently Asked Questions
How accurate are the results?
Results are based on standard formulas and the values you enter. They are accurate for educational and planning purposes.
Is this tool really free?
Yes, completely free. No signup, no hidden charges, no usage limits. Use it as often as you need.
Can I share the results?
Yes. You can take a screenshot or share the page link with anyone. The tool works the same for everyone.
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
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