SaaS LTV:CAC Calculator for Customer Lifetime Value, CAC and Payback

Estimate SaaS unit economics from average monthly revenue per account, gross margin, customer churn and fully loaded acquisition spending. The calculator returns customer acquisition cost, estimated customer lifetime, revenue LTV, gross-margin-adjusted LTV, LTV:CAC ratio, CAC payback and a target-based maximum CAC.

SaaS LTV, CAC and Payback Inputs

Use one currency for all monetary inputs. $ labels do not convert currencies.

Use customer churn and align acquisition costs with new customers for the same period.

Total Acquisition Spend-

Customer Acquisition Cost, CAC-

Estimated Customer Lifetime-

Revenue Lifetime Value-

Gross-Margin-Adjusted LTV-

LTV:CAC Ratio-

CAC Payback Period-

Lifetime Gross Profit After CAC-

Maximum CAC at Target Ratio-

Unit Economics Signal-

Example: B2B SaaS Customer Segment

Monthly ARPA: $150

Gross margin: 80%

Monthly customer churn: 4%

Marketing acquisition cost: $15,000

Sales acquisition cost: $10,000

Other acquisition cost: $5,000

New paying customers: 50

Target LTV:CAC ratio: 3.0x

Total acquisition spend: $30,000

CAC: $600

Estimated customer lifetime: 25 months

Revenue LTV: $3,750

Gross-margin-adjusted LTV: $3,000

LTV:CAC ratio: 5.0x

CAC payback: 5.0 months

Lifetime gross profit after CAC: $2,400

Maximum CAC at target ratio: $1,000

This simple model assumes one stable ARPA, gross margin and monthly customer churn rate. It does not model cohort curves, expansion, contraction, discount rates or changing acquisition efficiency.

SaaS LTV, CAC and Payback Formulas

Total Acquisition Spend = Marketing Cost + Sales Cost + Other Acquisition CostCAC = Total Acquisition Spend / New Paying CustomersEstimated Customer Lifetime = 1 / Monthly Customer Churn RateRevenue LTV = Monthly ARPA / Monthly Customer Churn RateGross-Margin-Adjusted LTV = (Monthly ARPA x Gross Margin) / Monthly Customer Churn RateLTV:CAC Ratio = Gross-Margin-Adjusted LTV / CACCAC Payback Months = CAC / (Monthly ARPA x Gross Margin)Maximum CAC at Target Ratio = Gross-Margin-Adjusted LTV / Target Ratio

Period alignment: Acquisition spend and new paying customers should be measured over the same month, quarter, or year so CAC remains accurate.

Margin adjustment: LTV uses gross profit rather than total revenue so direct delivery and service costs are properly reflected.

Simple estimate: A single churn rate provides a useful planning estimate, but it does not replace detailed cohort or retention analysis.

What to Include in SaaS Unit Economics

ARPA: Average recurring revenue generated per active paying account for the customer segment being evaluated. Gross margin: The percentage of revenue remaining after direct costs required to deliver, operate, and support the service. Customer churn: Paying accounts lost during the month divided by the number of active accounts at the beginning of that month. CAC: Total sales and marketing acquisition expense divided by new paying customers acquired during the same period. Segmentation: Calculate separate results for self-serve, sales-led, enterprise, and major acquisition channels when their economics differ significantly.

Use these results alongside retention cohorts, cash flow, pricing, expansion revenue, and channel-level performance before changing growth budgets.

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SaaS & Software

SaaS LTV:CAC, customer lifetime value and payback guide

Learn how to align acquisition periods, calculate fully loaded CAC, estimate gross-margin-adjusted LTV, interpret the ratio and avoid common churn and cohort mistakes.

Read the complete guide Browse all guides

SaaS LTV:CAC Calculator Frequently Asked Questions

Use these answers to choose consistent ARPA, churn, gross margin and acquisition-cost assumptions.

It divides aligned sales and marketing acquisition costs by new paying customers to calculate CAC. It estimates customer lifetime from monthly customer churn, adjusts lifetime revenue by gross margin, then calculates LTV:CAC, payback, lifetime gross profit after CAC and a target-based maximum CAC.

Use monthly customer churn for this simple ARPA-based lifetime formula because the denominator represents the rate at which paying accounts leave. Revenue churn can be useful for other analyses, but substituting it here can mix customer and revenue behavior and distort the estimate.

Include acquisition-related advertising, content, events, agencies, sales and marketing salaries, commissions, prospecting and CRM tools, contractors and other costs required to win new paying customers. Use a consistent allocation method and exclude unrelated product development, support and general administration.

A 3:1 ratio is a widely used reference point, not a universal pass or fail rule. Cash availability, payback speed, churn quality, growth stage, customer segment and the reliability of the underlying data can make the same ratio acceptable for one company and risky for another.

The simple formula assumes stable ARPA, gross margin and churn. Real cohorts often have changing churn, expansion, contraction, onboarding costs, discounting and segment differences. Use this result as a planning estimate and validate it with cohort retention and realized gross profit.

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SaaS LTV:CAC Calculator Disclaimer: This calculator provides simplified planning estimates for educational and preliminary business analysis. It assumes stable monthly ARPA, gross margin and customer churn and does not automatically model cohort retention curves, annual contracts, expansion revenue, contraction, reactivation, discount rates, taxes, financing, implementation costs, cash timing or channel differences. A favorable ratio does not guarantee profitability, liquidity or growth. Verify acquisition-cost allocation, customer counts, cost of revenue and retention data with qualified finance and accounting professionals before making budgeting, pricing, hiring or investment decisions.