Growth

LTV : CAC Ratio Calculator

Are you acquiring customers profitably? Calculate your LTV:CAC ratio and benchmark against industry standards.

Avg Monthly Revenue per Customer ($)

Gross Margin (%)

Monthly Churn Rate (%)

Customer Acquisition Cost — CAC ($) Total sales + marketing spend ÷ new customers

Customer LTV

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LTV : CAC Ratio

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CAC Payback Period

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Health Check

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LTV:CAC Explained

LTV:CAC is the single most important unit economics metric for any subscription or recurring business. It tells you whether your growth is sustainable.

LTV = (Avg Revenue/Month × Gross Margin%) ÷ Monthly Churn Rate
LTV:CAC = LTV ÷ CAC
Payback Period = CAC ÷ (Monthly Revenue × Gross Margin%)

LTV:CAC Benchmarks

<1:1 — Losing money on every customer. Stop spending on acquisition immediately.
1:1 – 3:1 — Marginal. You'll survive but won't scale efficiently.
3:1 — The benchmark. Healthy growth, sustainable acquisition spend.
5:1+ — Strong. You could spend more on acquisition and grow faster.

What is a good CAC payback period?

12 months or less is considered healthy for most SaaS businesses. Under 6 months is excellent. Over 18 months means you're tying up a lot of capital in customer acquisition before seeing returns.