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LTV : CAC and Payback Calculator

Customer lifetime value, acquisition cost, LTV : CAC ratio and CAC payback in months.

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Please note. This tool is for education and planning. It gives estimates, not financial advice. Results are estimates based on what you enter. Full disclaimer · How we build the numbers

What this tool does

LTV : CAC compares how much gross profit a customer brings over its lifetime with what it cost to win. Payback says how many months of gross profit repay that cost.

How to use it

Enter what an average customer pays per month and your gross margin.
Enter monthly churn: the share of customers you lose each month.
Enter total sales and marketing spend and new customers per month.

The maths, in plain view

CAC = S&M spend ÷ new customers
LTV = ARPA × gross margin ÷ monthly churn
CAC payback (months) = CAC ÷ (ARPA × gross margin)

A worked example

At $400 a month, 80% margin and 3% churn, LTV is about $10,700. Spending $24k to win 12 customers gives a $2,000 CAC: LTV : CAC of about 5.3x and a 6-month payback.

Tips

Calculate CAC by channel. A blended number can hide one channel that loses money.
If you are pre-revenue, show the assumption and its source rather than a precise ratio.

Want the full story? Read What investors check in your financial model in the first ten minutes.

Questions people ask

What is a good LTV to CAC ratio?

Around 3x is the most quoted benchmark for SaaS. Below 1x means you lose money on every customer; far above 5x can mean you are under-investing in growth.

What is a good CAC payback period?

Under 12 months is commonly seen as healthy for SMB-focused SaaS; enterprise businesses often accept 18-24 months because contracts are larger and churn is lower.

Should LTV use revenue or gross margin?

Gross margin. Revenue-based LTV ignores the cost of serving the customer and overstates the value investors care about.

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