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CAC and LTV Calculator

Punch in monthly spend, new customers, ARPU, gross margin, and churn. Get CAC, LTV, LTV:CAC ratio, and payback period. Decide whether to spend more or fix retention.

Inputs

Monthly marketing + sales spend

USD

New customers acquired per month

Average revenue per user, monthly

USD

Gross margin

Monthly churn rate

CAC

$400

cost per customer

LTV

$5,174

lifetime contribution

LTV : CAC ratio

12.9x

Elite. Spend more on acquisition.

Payback period

2.6 mo

Expected lifetime

33.3 mo

What the ratio tells you

CAC and LTV are unit economics, the smallest profitable transaction you can run. The ratio between them is the single most important number a founder learns to read. Investors look at this before they look at MRR.

Under 1.5x: You're losing money on each customer in real terms. Either CAC is too high (fix targeting) or LTV is too short (fix churn or expand ARPU).
1.5x to 3x: Marginal. Cashflow is tight. You can survive but not invest in growth.
3x to 5x: Healthy SaaS territory. Compound growth, recoverable losses, room to hire.
5x+: Elite. You should probably be spending MORE on acquisition. Under-spending kills market share.

Three levers when the ratio is bad

Cut CAC: better targeting, more PLG, fewer paid ads.
Extend LTV: reduce churn, expand seats, ship upgrade paths.
Raise ARPU: tier pricing, bundle, charge for outcomes.

Want this on autopilot

OpsWyse watches every deal, flags churn risk in real time, drafts renewal emails, and tells you which cohort to defend. Better LTV without more spend.

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Frequently asked

What's the formula for CAC?

CAC = total monthly marketing + sales spend divided by new paying customers acquired that month. This calculator uses the simple form. For a fully loaded CAC, add salaries, tools, content production, and overhead allocated to acquisition.

How do you calculate LTV?

LTV = ARPU × gross margin × expected lifetime in months. We compute expected lifetime as 1 divided by monthly churn rate. So if 3% of customers leave each month, expected lifetime is ~33 months.

What's a healthy LTV:CAC ratio?

3:1 is the SaaS benchmark. Below 1.5:1 you're bleeding. Above 5:1 you're under-investing in growth, you could spend more on acquisition. The number to optimize for sustainable growth is somewhere between 3:1 and 5:1.

What is payback period?

Payback = CAC divided by monthly gross profit per customer (ARPU × gross margin). It tells you how many months it takes to recoup the acquisition cost. SMB SaaS targets 12 months. Enterprise can stretch to 18 to 24.