LTV / CAC Calculator
Customer lifetime value versus acquisition cost, with a plain-English verdict.
Customer Value & Acquisition
Lifetime Value (LTV)
$1,000
Acquisition Cost (CAC)
$50
LTV : CAC Ratio
20.00 : 1
Average Customer Lifetime
25 months
The one ratio that tells you if growth is profitable
Spending to acquire customers only makes sense if those customers stay long enough to pay it back with room to spare. This LTV CAC calculator estimates lifetime value from your ARPU, gross margin and churn, works out your true cost per acquired customer from total spend and customers won, and puts the two head to head.
The verdict translates the ratio into plain English: at 3 to 1 or above your growth engine is healthy, between 1 and 3 it is tight, and below 1 every new customer quietly loses you money - a signal to fix churn, pricing or the channel before spending another dollar.
How is customer lifetime value (LTV) calculated?
LTV equals average revenue per user per month, multiplied by your gross margin percentage, multiplied by the average customer lifetime in months. Lifetime is estimated as 1 divided by your monthly churn rate, so 4% churn means about 25 months.
What is a good LTV to CAC ratio?
A ratio of 3 to 1 or higher is the common healthy benchmark for SaaS: each customer returns at least three times what they cost to acquire. Below 1 to 1 you lose money on every customer.