---
type: "Tool"
title: "LTV:CAC calculator: customer lifetime value and CAC"
description: "Enter monthly revenue per customer, your margin, monthly churn and acquisition spend to see LTV, CAC, the LTV:CAC ratio and the CAC payback period."
url: "https://www.roicool.com/en/tools/ltv-cac-calculator"
lang: "en"
dateModified: "2026-10-17"
resource: "https://www.roicool.com/en/tools/ltv-cac-calculator"
alternates:
  tr: "https://www.roicool.com/araclar/ltv-cac-hesaplama.md"
generated: { by: "process:roicool-cms", at: "2026-10-17T00:00:00.000Z" }
related:
  - { title: "CRM consulting", resource: "https://www.roicool.com/en/services/crm-consulting.md" }
  - { title: "Tools", resource: "https://www.roicool.com/en/tools.md" }
---

# LTV:CAC calculator. How many times does a customer pay back their cost?

LTV (customer lifetime value) is the gross profit a customer brings over the time they stay with you; CAC (customer acquisition cost) is what it costs to win a new customer. The LTV:CAC ratio shows how many times each customer pays back the cost of acquiring them.

## Your numbers

\*\*Monthly revenue per customer\*\*: A customer's average monthly payment (subscription, retainer).

\*\*Gross margin (%)\*\*

\*\*Monthly churn (%)\*\*: The share of customers who leave each month.

\*\*Acquisition spend\*\*: Total marketing and sales spend in the period.

\*\*New customers won\*\*: Customers won in the same period.

## Worked example

| Input | Value |
| --- | --- |
| Monthly revenue per customer | $1,000 |
| Gross margin (%) | 80% |
| Monthly churn (%) | 5% |
| Acquisition spend | $48,000 |
| New customers won | 10 |

| Result | Value |
| --- | --- |
| LTV:CAC ratio | 3.33x |
| LTV (customer lifetime value) | $16,000 |
| CAC (customer acquisition cost) | $4,800 |
| CAC payback period | 6 months |
| Average customer lifetime | 20 months |

## How it’s calculated A customer’s value, against the cost to win them.

- LTV = (Monthly revenue × Gross margin) ÷ Monthly churn
- CAC = Acquisition spend ÷ New customers
- LTV:CAC = LTV ÷ CAC
- Payback = CAC ÷ (Monthly revenue × Gross margin)
- Average lifetime = 1 ÷ Monthly churn

LTV (customer lifetime value) is the gross profit a customer brings over the time they stay with you; CAC (customer acquisition cost) is what it costs to win a new customer. The LTV:CAC ratio shows how many times each customer pays back the cost of acquiring them.

Below 1, every new customer costs more than they bring. A rule of thumb often quoted in SaaS is 3:1 (David Skok, "SaaS Metrics 2.0"): a ratio at that level is read as a sign of healthy acquisition spend.

The payback period shows cash flow: even with a good ratio, growth needs cash if it takes long to earn the CAC back.

A small improvement in churn changes LTV a lot: cutting monthly churn from 5% to 4% lifts the average lifetime from 20 to 25 months.

## Limits

- It assumes constant monthly revenue and constant churn; in reality both vary by customer group and over time.
- Future profit is not discounted to today's value; with long lifetimes LTV is optimistic.
- If the sales team's cost is left out of CAC, the ratio looks better than it is.

## FAQ

### What is a good LTV:CAC ratio?

A rule of thumb often quoted in SaaS is 3:1 (David Skok, "SaaS Metrics 2.0"). Below 1, acquiring customers loses money; far above, you may be spending too little to grow.

### How do you calculate LTV?

Multiply the monthly revenue per customer by the gross margin and divide by the monthly churn rate. That gives the gross profit a customer brings over their average lifetime.

### What should CAC include?

All marketing and sales spend to win new customers: ads, agency, tools and the sales team's cost. Counting ad spend alone makes CAC look lower than it is.

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Source: https://www.roicool.com/en/tools/ltv-cac-calculator · Last updated: 2026-10-17