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LTV to CAC Ratio Calculator (100% FREE)

This LTV to CAC ratio calculator estimates customer lifetime value from your average revenue, gross margin and churn, then compares it with your acquisition cost.

Find out what each acquired customer is worth relative to cost.

Free, no signup. Runs in your browser, nothing is sent anywhere.

Customers lost per month, not revenue churn.

Runs in your browser. Uses a simple constant churn model.

LTV to CAC

4 : 1

Estimated with constant churn and margin, not real cohort cash flow.

Monthly gross profit per customer$80
Estimated customer lifetime25 months
Lifetime value (LTV)$2,000
CAC$500
CAC payback6.25 months

LTV = monthly revenue × gross margin ÷ monthly churn. Treat the ratio as a diagnostic: check payback time and cohorts too.

How it works

How to use the LTV to CAC Ratio Calculator in three steps.

  1. Step 1

    Enter revenue and margin

    Add monthly revenue per customer and gross margin.

  2. Step 2

    Add churn and CAC

    Enter monthly customer churn and average acquisition cost.

  3. Step 3

    Review the result

    Compare modeled lifetime value against CAC.

Customer lifetime value built from recurring purchases compared against acquisition cost in a balance-like visual and a simple ratio line.

Examples

LTV to CAC, worked through.

Illustrative numbers to show the formula. They aren't benchmarks, and all assume constant churn and margin.

  1. A mid market plan

    Input: $100 per month, 80% margin, 4% monthly churn, CAC $500. Assumes constant churn and margin.

    ResultLTV = 100 x 0.80 / 0.04 = $2,000. Ratio 4.0 : 1. Payback 500 / 80 = 6.25 months.

  2. A low price plan

    Input: $50 per month, 70% margin, 5% monthly churn, CAC $350. Higher churn shortens lifetime and squeezes the ratio.

    ResultLTV = 50 x 0.70 / 0.05 = $700. Ratio 2.0 : 1. Payback 350 / 35 = 10 months.

  3. A sales led plan

    Input: $200 per month, 75% margin, 2% monthly churn, CAC $3,000. A decent ratio can still mean a long wait to earn the spend back.

    ResultLTV = 200 x 0.75 / 0.02 = $7,500. Ratio 2.5 : 1. Payback 3,000 / 150 = 20 months.

Good to know

Reading LTV:CAC properly.

  1. LTV isn't total revenue

    A customer paying $100 a month isn't $100 of profit. Gross margin covers delivery costs. A simple LTV model combines revenue, margin and expected retention, but real LTV varies by cohort and plan.

  2. The ratio is a diagnostic, not a target

    A high ratio can mean room to grow, or underinvestment. A good aggregate can hide poor retention in new cohorts. Look at the inputs and payback period too.

  3. Formula

    LTV = monthly revenue per customer x gross margin ÷ monthly churn (constant churn model). Ratio = LTV ÷ CAC. Lifetime in months = 1 ÷ churn. Payback in months = CAC ÷ (monthly revenue x margin). With zero churn, a finite LTV can't be estimated.

FAQ

Questions, answered.

What is LTV to CAC?

A comparison of customer lifetime contribution with the average cost to acquire a customer.

How do I estimate LTV for SaaS?

One simple method divides monthly gross profit per customer by monthly churn, assuming churn stays roughly stable.

What is a good LTV:CAC ratio?

Benchmarks vary by business and stage. Treat it as a diagnostic, not a pass or fail score.

Should I use gross revenue or gross profit?

Gross margin adjusted LTV is usually more useful.

What if my monthly churn is zero?

A simple model can't estimate a finite lifetime. Use observed retention data or a realistic time horizon.

Can LTV:CAC tell me whether to buy more ads?

Not alone. Look at payback, cash, cohorts and channel quality.

Keep going

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