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CAC, LTV & Payback Calculator

Compute customer acquisition cost, lifetime value, LTV:CAC ratio, and payback period — with built-in benchmarks for what's healthy.
CAC
$2K
LTV
$4K
LTV : CAC ratio
1.9x
Payback period
13.3 mo
Benchmarks
  • Healthy LTV:CAC ratio≥ 3x
  • Healthy payback≤ 12 months
  • Investor-acceptable churn (SMB SaaS)≤ 5% / mo
  • Investor-acceptable churn (mid-market)≤ 1.5% / mo
What this meansYour unit economics are workable but need attention. Improve activation or reduce churn before scaling acquisition spend.

What is the cac, ltv & payback calculator?

CAC (customer acquisition cost) is what you spend on average to acquire one paying customer. LTV (lifetime value) is the total gross profit you'll make from that customer before they churn. The ratio between them — and the time it takes to recover what you spent — is the single best test of whether your business actually works.

This calculator computes all four numbers — CAC, LTV, LTV:CAC ratio, and payback period — and tells you whether each is in healthy, workable, or dangerous territory.

Why this matters for founders & operators

Most early-stage startups have growing revenue and don't know whether scaling will help or hurt them. Unit economics is the answer.

If LTV:CAC ≥ 3 and payback ≤ 12 months, more spend = more revenue at the same multiple. If the numbers are worse, scaling acquisition will burn more cash than it generates and the business gets sicker the bigger it gets.

Investors compute these numbers from your data room — sometimes differently than you do. Knowing your own numbers (and being honest about churn and gross margin) is non-negotiable past seed stage.

How to use this calculator

  1. 1
    Add your fully-loaded acquisition spend

    Marketing + sales costs together. Include salaries, tools, ad spend, content, contractors. Don't exclude anything — the most common mistake is to under-count CAC.

  2. 2
    Enter the new paying customers you actually got

    Net new — exclude trials that didn't convert. If your sales cycle is long, average across a recent few months for stability.

  3. 3
    Set ARPA and gross margin honestly

    ARPA is the average monthly revenue per account. Gross margin is what's left after delivering the service: hosting, support, payment fees, etc. SaaS gross margins are typically 70–85%.

  4. 4
    Use logo churn, not revenue churn

    Logo churn is what % of customers leave each month. Use this for LTV calculation. Revenue churn (which can be net-negative thanks to expansion) is a separate metric.

  5. 5
    Read the verdict

    Green ratio + green payback = scale. Yellow = fix retention or conversion before adding more spend. Red = scaling will make things worse, not better.

FAQ

What's the formula for LTV?+
LTV = (ARPA × gross margin) / monthly churn rate. The result is the gross profit you'll get from an average customer over their lifetime.
Should I include sales reps' base salaries in CAC?+
Yes. Anyone whose job is to bring customers in counts. The point of CAC is to know what acquisition truly costs you — not the cherry-picked variable portion.
What's a healthy LTV:CAC ratio for B2B SaaS?+
≥ 3x is the standard rule of thumb. Below 3x and growth gets expensive; above 5x and you're probably under-investing in growth.
Why is payback period a separate metric from LTV:CAC?+
LTV:CAC tells you whether the business is fundamentally profitable. Payback tells you how long you have to fund growth before each customer becomes net-positive on cash. A 5x LTV:CAC business with 3-year payback can still kill you on cash.
Can my LTV:CAC be infinite?+
Mathematically yes — if churn is zero or CAC is zero. Practically: don't trust it. If your model returns infinity, your inputs need a sanity check.