Free LTV Calculator
Enter revenue per customer, margin, churn and acquisition cost. Get LTV, the LTV to CAC ratio and your payback period.
Your LTV to CAC ratio is 4.1:1.
Each customer is worth $2,107 and costs $520 to win. You earn it back in 8.2 months.
- HealthyAbove 3:1, the usual bar for a healthy business.
- FastPayback in 8.2 months. Under 12 is a common bar.
- Margin per customer$79 × 80%$63.20 / mo
- Average lifetime1 ÷ 3%33.3 mo
- Lifetime value$63.20 × 33.3 months$2,107
- CAC payback$520 ÷ $63.208.2 mo
- LTV to CAC$2,107 ÷ $5204.1:1
This ratio assumes buyers show up at $520 each. See who else is chasing them.Free scan, under a minute.
Run a free scanHow to calculate LTV and the LTV to CAC ratio
LTV is the gross margin a customer brings in before they leave. With 3% monthly churn, the average customer stays 1 ÷ 0.03 = 33 months.
Worked example. A $79 plan at an 80% margin keeps $63.20 a month. At 3% churn that is 33.3 months, so LTV is $2,107. With a $520 CAC the ratio is 4.1:1 and CAC pays back in 8.2 months.
A healthy ratio only matters if buyers exist at that cost. Early on, CAC is a guess until real customers pay it. Check who else is chasing your buyers: run a free validation scan.
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Try it freeFrequently asked questions
What is a good LTV to CAC ratio?
3:1 is the usual floor for a healthy business. Below 1:1 you lose money on every customer. Far above 5:1 often means you could spend more on growth.
How do I calculate CAC?
Add up what you spent on sales and marketing in a period, salaries and tools included, and divide by the customers you won in that period.
What is CAC payback?
The months of gross margin it takes to earn back what you spent to win a customer. Under 12 months is a common bar for software.
Why use gross margin and not revenue?
Hosting, support and payment fees come out of every bill. Only what is left can pay back CAC.
What happens with 0% churn?
A customer who never leaves has no lifetime limit, so LTV has no upper bound. The calculator says so instead of printing a number. Use your real cancel rate, or 1% to see a finite figure.