Rex says
Money math without the spreadsheet headache. Plug in your numbers and I'll show you exactly where the dollars land.
Try a scenario
Click to load — tweak from there.Inputs
Result
LTV : CAC ratio
4.44
CAC payback period (months)
12.5
Lifetime gross profit per customer
$18,667
Expected customer lifetime (months)
55.6
Monthly gross profit per account
$336
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Got your number — what next?
Pick one, it takes 20 secondsHow to use this
- 1Enter average revenue per account ($/mo).
- 2Enter gross margin (%).
- 3Enter monthly revenue churn (%).
- 4Enter customer acquisition cost ($).
- 5Read your ltv : cac ratio on the right — it updates as you type.
- 6Hit Share to keep the scenario or send it to someone.
About this calculator
LTV:CAC compares the gross profit a customer generates over their lifetime to what you spent acquiring them, and payback period says how long you wait to get that acquisition cost back in cash. Both matter — a 5:1 ratio with a 30-month payback still starves a company of cash. This calculator uses gross-profit-based LTV rather than the naive revenue version, so the answer accounts for cost of serving the customer. The commonly cited targets are 3:1 or better on the ratio and under 12 months on payback for SMB, or under 18-24 months for enterprise where contract values and retention are both much higher.
Worked example
Using the values the calculator loads with:
Inputs
- Average revenue per account: 420 $/mo
- Gross margin: 80 %
- Monthly revenue churn: 1.8 %
- Customer acquisition cost: 4200 $
Results
- LTV : CAC ratio: 4.44
- CAC payback period (months): 12.5
- Lifetime gross profit per customer: $18,666.67
- Expected customer lifetime (months): 55.6
- Monthly gross profit per account: $336.00
What each field means
Inputs
- Average revenue per account ($/mo)
- The average revenue per account used in the calculation, measured in $/mo. Starts at 420 $/mo so you have a working example on load.
- Gross margin (%)
- The gross margin used in the calculation, measured in %. Starts at 80 % so you have a working example on load. Accepted range: 1–100 %.
- Monthly revenue churn (%)
- The monthly revenue churn used in the calculation, measured in %. Starts at 1.8 % so you have a working example on load. Accepted range: 0.05–50 %.
- Customer acquisition cost ($)
- The customer acquisition cost used in the calculation, measured in $. Starts at 4200 $ so you have a working example on load.
Results
- LTV : CAC ratio
- Returned as a decimal number and shown as the headline result. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- CAC payback period (months)
- Returned as a decimal number. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Lifetime gross profit per customer
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Expected customer lifetime (months)
- Returned as a decimal number. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Monthly gross profit per account
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
FAQ
Why use gross profit instead of revenue for LTV?
Because hosting, support, and payment processing consume real money every month the customer stays. A revenue-based LTV overstates the ratio by roughly the inverse of gross margin — at 70% margin, it inflates your number by more than 40%.
Is a very high LTV:CAC ratio good?
Above roughly 5:1 usually signals underinvestment in acquisition rather than brilliance. If each customer returns five times their cost, spending more to get more is almost always the right call — assuming payback period stays fundable.
Why does payback matter separately?
Because it's a cash constraint, not a profit one. A long payback means every new customer deepens your cash hole before filling it, so a fast-growing company with 30-month payback can go bust while being highly profitable per customer on paper.
How do I handle expansion revenue?
Use net revenue churn rather than gross in the churn input. If expansion exceeds churn, net churn goes negative and the simple 1÷churn lifetime formula breaks — in that case model a cohort forward explicitly rather than trusting this shortcut.
Accuracy and limitations
- Results are estimates before tax, fees, and inflation unless an input explicitly covers them.
- Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.
- This is educational maths, not financial advice. Check anything contractual with the lender or your accountant.
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Cite this calculator
Writing about this topic? Grab a citation — every link helps keep these tools free.
RevenueLab. (2026). LTV to CAC and Payback Period Calculator. Retrieved from https://www.revenuelab.fyi/toolbox/saas-ltv-cac-payback
<p>Source: <a href="https://www.revenuelab.fyi/toolbox/saas-ltv-cac-payback" target="_blank" rel="noopener">LTV to CAC and Payback Period Calculator — RevenueLab</a> (2026).</p>
Source: [LTV to CAC and Payback Period Calculator — RevenueLab](https://www.revenuelab.fyi/toolbox/saas-ltv-cac-payback) (2026).