CAC and LTV Calculator

Written byOleh Soloninupdated 25 September 2026

Marketing spend

Customers acquired

Average order value

Purchases a year

Customer lifespan, years

Gross margin, %

Result

CAC$5,000.00
LTV$9,600.00
LTV to CAC1.92
AssessmentLTV exceeds CAC, but below the 3:1 guideline
Payback, months12.5
Revenue per customer$32,000.00

Three to one is a guideline, not a norm

Customer acquisition cost, lifetime value, the ratio between them and how long acquisition takes to pay back.

Unit economics comes down to two numbers: what a customer costs to win and what they bring over their life. The first is CAC, all acquisition spend over new customers. The second is LTV — average order value times purchase frequency times lifespan times margin.

A common guideline is an LTV to CAC ratio above three and acquisition paid back within a year; David Skok put it that way in "SaaS Metrics 2.0" and called both only guidelines. The calculator uses 3 as a reference line: profitability also depends on fixed costs and how fast the money comes back.

How to use

Enter the marketing spend for a period and the customers it brought in.
Set the average order value, how often a customer buys in a year, and how long they stay.
Give the contribution margin: LTV here is built on margin, not revenue.
Read the payback in months alongside the ratio — it tells you how much cash has to sit in the business while you wait.

The LTV-to-CAC ratio at different acquisition costs

Each row is a run of this calculator at 300,000 of marketing spend, an order value of 4,000, four purchases a year, a two-year lifetime and a 30 percent margin. Only the customer count changes.

LTV stays at 9,600 throughout — 32,000 of revenue multiplied by the margin. What moves is CAC, and with it the ratio and the payback. Note the first row: 25 months to pay back against a 24-month customer lifetime, and the ratio duly reports 0.96.

Runs of this calculator at 300,000 of spend, an order value of 4,000, four purchases a year, a two-year lifetime and a 30 percent margin.
Customers acquired	CAC	LTV	LTV to CAC	Payback	Calculator's verdict
30	10,000	9,600	0.96	25 months	Acquisition costs more than the customer brings in
45	6,666.67	9,600	1.44	16.7 months	LTV exceeds CAC, but below the 3:1 guideline
60	5,000	9,600	1.92	12.5 months	LTV exceeds CAC, but below the 3:1 guideline
90	3,333.33	9,600	2.88	8.3 months	LTV exceeds CAC, but below the 3:1 guideline
150	2,000	9,600	4.8	5 months	LTV to CAC of 3 or better — at or above David Skok's guideline

What this calculator shows

CAC, LTV and the ratio between them
How many months of margin it takes to repay acquisition
The LTV-to-CAC ratio against the 3:1 guideline

What to keep in mind

LTV is computed on margin, not revenue: a customer bringing a million of turnover at a five percent margin is worth fifty thousand.
CAC includes all acquisition costs — marketing salaries and agencies as well as media spend.

FAQs

Why three to one specifically?

It is a rule of thumb from SaaS practice: David Skok writes in "SaaS Metrics 2.0" that the best SaaS businesses run above three, and calls it a guideline. LTV here is already built on margin, so at a ratio of 3 acquisition leaves 2 × CAC for the costs not counted and for profit.

What belongs in CAC?

Every acquisition cost: media, marketing and sales salaries, agencies, tools. Counting media alone is the commonest mistake and makes the economics look healthier than they are.

How do I find the customer lifespan?

From churn: one divided by monthly churn gives the average life in months. At five percent monthly churn a customer stays twenty months.

Why does payback matter more than the ratio?

Because it is about cash today. A fine LTV to CAC ratio with a two-year payback means all growth has to be financed out of pocket or on credit.

How does the calculator work out the payback in months?

It divides CAC by the monthly margin a customer generates. At an order value of 4,000, four purchases a year and a 30 percent margin, a customer brings 400 a month, so a CAC of 5,000 comes back in 12.5 months.

What does a payback longer than the customer lifetime mean?

That the customer leaves before paying for their own acquisition. In the first row of the table the payback is 25 months against a 24-month lifetime — and the LTV-to-CAC ratio there is duly below one. Two views of the same fact.

Worked example

A service with repeat purchases

Input: 300,000 marketing, 60 customers, 4,000 order value, 4 purchases a year, 2 years, 30 percent margin

Output: CAC 5,000, LTV 9,600, ratio 1.92 — LTV exceeds CAC, but below the 3:1 guideline

Note: Payback is twelve and a half months. A year to recover acquisition means the cash gap has to be funded somewhere. Weaker retention shrinks LTV: with everything else unchanged, LTV falls to CAC at an average customer life of 12.5 months.

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