CAC vs LTV Ratio
LTV / CAC ratio. Healthy SaaS: 3:1+; under 1:1 burns money.
Result
LTV : CAC
4.38 : 1
LTV $875 · CAC $200. ✓ Healthy SaaS standard.
- CAC$200.00
- ARPU (monthly)$50.00
- Gross margin70.0%
- Monthly churn4.00%
- Avg lifetime (months)25.0
- LTV$875
- LTV/CAC4.375
- CAC payback (months)5.71
- Verdict✓ Healthy SaaS standard
Step-by-step
- Lifetime = 1 / churn = 25.00 months.
- LTV = ARPU × gross margin × lifetime = 50 × 0.7 × 25.00 = $875.
- LTV/CAC = 875 / 200 = 4.38.
How to use this calculator
- Enter CAC (total marketing+sales / new customers).
- Enter ARPU (monthly).
- Gross margin and churn from financials.
About this calculator
LTV / CAC ratio is the SaaS profitability holy grail. 3:1 is healthy (David Skok benchmark). Below 1:1 = unsustainable. Above 5:1 may indicate under-investment in growth (could spend more to acquire). LTV = ARPU × gross margin × average customer lifetime (= 1 / monthly churn). Payback period (CAC / monthly contribution margin) under 12 months is target; under 6 is best-in-class.
Frequently asked
Annual: <5% best-in-class consumer SaaS, 5-10% standard, 15%+ concerning. Monthly: divide annual by 12 (approx).
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