Free LTV to CAC Ratio Calculator
Calculate your Customer Lifetime Value (LTV) to Acquisition Cost (CAC) ratio instantly. Free interactive SaaS unit economics calculator — no signup required.
What this tool does
Calculate your Customer Lifetime Value (LTV) to Customer Acquisition Cost (CAC) ratio — the canonical SaaS unit-economics health metric. The gold standard is 3:1 or higher.
Inputs
- Average Revenue Per Account (ARPA), monthly or annual
- Gross margin percentage
- Average customer lifetime in months (or monthly churn rate)
- Total sales and marketing spend for the period
- Number of new customers acquired in the period
Outputs
- Customer Lifetime Value (LTV) in dollars
- Customer Acquisition Cost (CAC) in dollars
- LTV:CAC ratio
- CAC payback period in months
- Verdict against the 3:1 benchmark
Frequently asked questions
What is LTV:CAC Ratio?
The LTV:CAC ratio measures the relationship between the lifetime value of a customer (LTV) and the cost to acquire them (CAC). It's the ultimate indicator of SaaS unit economics.
What is a good LTV:CAC Ratio?
The gold standard for SaaS is 3:1 or higher. This means you make 3x what you spend to acquire a customer. Less than 1:1 means you lose money on acquisition. Higher than 5:1 means you could probably grow faster by spending more on marketing.