Tools LTV : CAC Calculator
LTV : CAC Calculator
LTV:CAC is the health check for any subscription or repeat-purchase business. Enter revenue per customer, gross margin, monthly churn, and your cost to acquire a customer to get lifetime value, the LTV:CAC ratio, and how long it takes to pay back acquisition.
LTV : CAC
6.7 : 1
Healthy. 3:1 or better is the benchmark.
Customer LTV
$2,667
Gross-margin dollars per customer.
CAC payback
5.0 mo
Months to recover CAC.
LTV = (ARPU × gross margin) ÷ monthly churn. A ratio of 3:1+ is generally considered healthy.
Formula: LTV = (ARPU × Gross margin) ÷ Monthly churn · Ratio = LTV ÷ CAC
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Frequently asked
What is a good LTV:CAC ratio?
A ratio of 3:1 or higher is generally considered healthy — you earn at least three times what it costs to acquire a customer. Below 1:1 you lose money on every customer; far above 3:1 you may be under-investing in growth.
How is customer lifetime value (LTV) calculated?
A common formula is ARPU multiplied by gross margin, divided by your churn rate. That gives the gross-margin dollars a customer contributes over their expected lifetime.