LTV:CAC calculator
Work out customer lifetime value from gross profit, not revenue, compare it with what you pay to win a customer, and see how many months it takes to earn that cost back. For subscriptions and for repeat purchases. Free, no sign-up, nothing leaves your browser.
Made by Anatolii Ulitovskyi 
Fact-checked by RH Fardin Updated Lower CAC with the traffic you already pay for
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The method
How the LTV:CAC calculator works
Three numbers: what a customer leaves you in profit, what it costs to win one, and how fast you earn that cost back.
Lifetime value here is gross profit, not revenue. A customer who pays $99 a month at an 80% margin leaves you $79.20 a month to pay for acquisition and everything else. Dividing by monthly churn gives the expected lifetime: at 3% churn a customer stays about 33 months on average.
For repeat purchases, lifetime value is average order value × orders per year × years as a customer × gross margin, and payback is the number of orders it takes before the margin covers CAC.
CAC is your total sales and marketing spend in a period divided by the new customers it brought. If you enter spend and new customers, the calculator works out CAC for you.
$2,640
$99 × 80% ÷ 3% = $2,640
$79.20 a month for about 33 months.
$800
$9,600 ÷ 12 = $800
A month of sales and marketing spend ÷ new customers.
3.3:1, paid back in 10.1 months
$2,640 ÷ $800 · $800 ÷ $79.20
Above 3:1, but slower than the 5–7 months of the best SaaS companies.
Benchmarks
What is a good LTV:CAC ratio?
The 3:1 rule comes from SaaS investor David Skok. Read it together with payback time.
| LTV:CAC | What it usually means |
|---|---|
| Below 1:1 | Each new customer costs more than the gross profit they will ever bring. Growth burns money. |
| 1:1 to 3:1 | Customers pay back acquisition but leave little for the rest of the business. |
| 3:1 and above | The guideline for a healthy subscription business. Skok writes that the best SaaS companies are above 3, sometimes 7 or 8. |
Payback matters as much as the ratio. Skok notes that many of the best SaaS businesses recover CAC in 5–7 months and treats more than 12 months as a warning sign, because cash spent today comes back slowly and a churned customer may never pay it back. A very high ratio can also mean you are spending too little on growth, which is a judgment call rather than a rule.
Benchmarks come from venture-backed software companies. A local service business or online shop can be healthy with different numbers, so compare yourself with your own past months first.
Your data
What counts as customer acquisition cost
Most teams underestimate CAC by counting only ad spend.
Fully loaded spend
Ads, sponsorships, content, events, sales and marketing tools, and the salaries, commissions and bonuses of the people who find and close new customers.
Keeping customers
Account management, support and renewals belong to the cost of keeping customers, which sits in gross margin or operating costs, not CAC.
Spend and wins
If your sales cycle is two months, compare spend with the customers won two months later, or use a quarter of data to smooth it out.
Levers
How to improve LTV:CAC
Every input in the calculator is a lever. Use the scenario table to see which one moves the ratio most.
Keep customers longer
Cutting monthly churn from 3% to 2% raises lifetime value by half. Onboarding and quick answers to support questions usually matter most.
Win more from the same spend
Answering website visitors quickly, including after hours, and qualifying them before a call turns more of the same traffic into customers, which lowers CAC.
Raise profit per customer
Price increases, annual plans and add-ons raise revenue per customer; lower serving costs raise margin. Both lift LTV without new acquisition spend.
Spreadsheets
LTV and CAC formulas for Excel and Google Sheets
A1 = revenue per customer per month, B1 = gross margin, C1 = monthly churn, D1 = sales and marketing spend, E1 = new customers.
Customer acquisition cost
Customer lifetime value (gross profit)
LTV:CAC ratio
CAC payback in months
FAQ
LTV and CAC questions
How do you calculate LTV to CAC ratio?
Divide customer lifetime value by customer acquisition cost. For a subscription, lifetime value is monthly revenue per customer × gross margin ÷ monthly churn; CAC is sales and marketing spend ÷ new customers.
What is a good LTV:CAC ratio?
3:1 or higher is the common guideline for subscription businesses. Read it with CAC payback: recovering CAC within 12 months is the usual target, and the best SaaS companies do it in 5–7 months.
Should LTV use revenue or gross profit?
Gross profit. Revenue-based LTV ignores the cost of serving the customer and makes the ratio look better than it is.
How do I calculate customer lifetime value without churn data?
Use the repeat purchases mode: average order value, orders per year, years a customer keeps buying and gross margin. Estimate the years from customers who first bought two or three years ago.
What is CAC payback period?
The number of months of gross profit from a new customer it takes to cover what you spent to win them: CAC ÷ (monthly revenue per customer × gross margin).
What should be included in CAC?
All sales and marketing costs of winning new customers in a period: ads, tools, content, events, and the pay of the people who find and close new customers. Leave out the cost of serving existing customers.
Why does a small change in churn change LTV so much?
Expected lifetime is 1 ÷ churn. Going from 3% to 2% churn stretches the average lifetime from about 33 to 50 months, so lifetime value rises by half.
Does the calculator store my data?
No. Everything runs in your browser. The share link keeps your numbers in the address after the # sign, which is not sent to our server.
References
Sources
- LTV:CAC above 3 and CAC recovered in 5–7 months, over 12 months a warning sign: David Skok, "SaaS Metrics 2.0 – A Guide to Measuring and Improving What Matters", For Entrepreneurs, first published January 2013, checked October 6, 2026
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