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SaaS LTV:CAC Ratio & Unit Economics Solver

The SaaS LTV:CAC ratio compares the gross margin lifetime value of a customer (ARPA × GM%) / Churn% against the upfront Customer Acquisition Cost CAC.

R = (ARPA × (GM / 100)) / ((c / 100) × CAC)
Pick which value you want to calculate (or type into any field):Solving for: LTV:CAC — LTV to CAC Ratio
Calculated

Lifetime gross profit multiple over acquisition cost

0.520
unit

Average monthly recurring revenue per customer

1050,000.00

Subscription gross margin percentage

2095
%

Percentage of customers canceling per month

0.115
%

Sales and marketing cost per acquired customer

50250,000.00
Calculated Result · LTV to CAC Ratio (LTV:CAC)
4

Step-by-Step Calculation

01Canonical Law: R = (ARPA × (GM / 100)) / ((c / 100) × CAC)
02Given Inputs (Base Units): ARPA = 400 $, GM (%) = 80, c (%) = 2, CAC = 4,000 $
03Solve for LTV:CAC (LTV to CAC Ratio): LTV:CAC = 4

The SaaS LTV:CAC ratio compares the gross margin lifetime value of a customer (ARPA × GM%) / Churn% against the upfront Customer Acquisition Cost CAC.

Real-World Reference Values

Healthy SaaS Benchmark3.0x – 5.0x LTV:CAC

Institutional standard balancing growth and profitability

Under-Investing in Growth> 6.0x LTV:CAC

Indicates room to scale paid acquisition faster

Customer Lifetime (Months)1 / (c / 100) = 50 mo

Implied average tenure at 2.0% monthly churn

20-Row Comparison Table

LTV to CAC Ratio (LTV:CAC) · Monthly Revenue Per Account (ARPA)

SaaS LTV:CAC Ratio & Unit Economics Solver — Monthly Revenue Per Account → LTV to CAC Ratio
#Monthly Revenue Per Account ($)LTV to CAC Ratio (LTV:CAC)Δ %
0110 $0.1 -97.50%
02400 $Current4 0.00%
03774.5921 $7.7459 +93.65%
041,156.89 $11.5689 +189.22%
051,539.18 $15.3918 +284.80%
061,921.48 $19.2148 +380.37%
072,303.78 $23.0378 +475.94%
082,686.07 $26.8607 +571.52%
093,068.37 $30.6837 +667.09%
103,450.66 $34.5066 +762.67%
113,832.96 $38.3296 +858.24%
124,215.26 $42.1526 +953.81%
134,597.55 $45.9755 +1049.39%
144,979.85 $49.7985 +1144.96%
155,362.14 $53.6214 +1240.54%
165,744.44 $57.4444 +1336.11%
176,126.74 $61.2674 +1431.68%
186,509.03 $65.0903 +1527.26%
196,891.33 $68.9133 +1622.83%
207,273.63 $72.7363 +1718.41%
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Frequently Asked Questions

How is Customer Lifetime Value (LTV) derived inside this formula?+

LTV equals Monthly Gross Margin (ARPA × GM%) divided by the monthly churn rate (c / 100). Dividing LTV by CAC yields R.

How do I find the maximum monthly churn rate allowed for a 3.0x LTV:CAC?+

Select c (%) as the solved variable and set LTV:CAC to 3.0.

What if my annual churn is known instead of monthly churn?+

Divide annual churn by 12 as a close first-order approximation for low monthly churn rates (<2% / mo).