Dashboard

LTV and CAC calculator

LTV, CAC and payback calculator

See what a customer is worth over their lifetime, what you pay to win one, and how many months it takes to earn that cost back.

  • Free
  • No signup
  • Runs in your browser

Your numbers

Revenue minus hosting, payment fees, support and AI/API costs. SaaS is often 70–85%.

Customers lost in a month ÷ customers at the start of it.

Unit economics

Healthy

Each customer returns 3.3× what it cost, and pays it back in 7.7 months.

Lifetime value (LTV)
$980
gross margin over an average lifetime
LTV : CAC
3.3 : 1
rule of thumb: 3:1 or better
CAC payback
7.7 months
rule of thumb: under 12
Average lifetime
25 months
1 ÷ monthly churn

To keep a 3:1 ratio you can spend up to $327 to win a customer. The 3:1 and 12-month marks are common SaaS rules of thumb, not laws: a bootstrapped product with cheap acquisition can live well below them.

Lower your CAC with a free launch

A launch on LarkLaunch costs nothing: a full Monday to Sunday week on the leaderboard and a permanent page with a dofollow link to your site.

Launch your product

How to use the LTV and CAC calculator

  1. Enter what an average customer pays a month and your gross margin.
  2. Enter monthly churn: customers lost in a month ÷ customers at the start of it.
  3. Enter your CAC, or switch to “Work it out” and enter what you spent and how many customers it won.
  4. Read the verdict, LTV, LTV:CAC and payback, then copy the summary for your notes or a deck.

The formulas

  • Average lifetime = 1 ÷ monthly churn. At 4% churn a customer stays 25 months on average.
  • LTV = monthly revenue per customer × gross margin × lifetime. At $49 and 80% margin, that is $39.20 a month, or $980.
  • LTV:CAC = LTV ÷ CAC. With a $300 CAC: 3.3 to 1.
  • CAC payback = CAC ÷ monthly gross margin per customer: $300 ÷ $39.20 = 7.7 months.

Where the numbers mislead

With few customers, one cancellation swings churn a lot, so LTV jumps around. Use at least three months of churn data, and treat very low churn with suspicion: the calculator caps the lifetime at 10 years. Early on, CAC also hides your own time; count it if you want to know whether a channel would still work once you pay someone to run it. To see how many customers a revenue goal needs, use the MRR goal calculator.

Frequently asked questions

How do you calculate LTV for a SaaS?

Monthly revenue per customer × gross margin ÷ monthly churn. Dividing by churn gives the average number of months a customer stays; using margin instead of revenue counts only what you keep.

What is a good LTV:CAC ratio?

Around 3:1 is a widely used rule of thumb for SaaS, with CAC paid back within about 12 months. Below 1:1 you lose money on every customer. These are conventions, not laws: what matters is whether you can fund growth until customers pay back.

What counts in customer acquisition cost?

Everything spent to win customers in a period divided by the customers won in it: ads, sales and marketing salaries, tools, contractors, and your own time if you want a true number.