LTV to CAC Payback Calculator

About this calculator

LTV:CAC compares customer lifetime value to customer acquisition cost, and this calculator builds LTV up from its components rather than asking you to guess it directly: LTV = (ARPU × gross margin) ÷ churn rate, since a customer’s lifetime revenue depends on how much they pay, how much of that is actual profit, and how long they stick around before churning.

SaaS investors and operators treat an LTV:CAC ratio around 3:1 as the traditional healthy benchmark — high enough to prove the business model works, but not so high that it signals under-investment in growth — and CAC payback period (how many months of gross margin it takes to earn back what was spent acquiring a customer) is the complementary metric that captures cash-flow risk a ratio alone misses, since a company can have a great LTV:CAC ratio on paper while still running out of cash if payback takes 18+ months. Board decks and fundraising materials for subscription businesses report both numbers side by side for exactly this reason, along with the resulting ROI on acquisition spend.

Enter your ARPU, gross margin, monthly churn rate and CAC, and this calculator derives your LTV, CAC payback period in months, LTV:CAC ratio and ROI in one step.