How the CAC vs. LTV calculator works
This free CAC vs. LTV calculator computes your customer acquisition cost, customer lifetime value, LTV:CAC ratio, and CAC payback period from five inputs: sales and marketing spend, new customers acquired, average revenue per account, gross margin, and monthly churn. It is built for early-stage SaaS founders who need to know whether their growth spend is actually efficient. No signup required, and results are shareable via URL.
The formulas
CAC = sales & marketing spend / new customers acquired
Include salaries and tooling for sales and marketing, not just ad spend.
LTV = ARPA x gross margin % x (1 / monthly churn rate)
1 / monthly churn is the average customer lifetime in months - 5% monthly churn means a 20-month average lifetime.
Ratio = LTV / CAC
The core unit-economics health metric for subscription businesses.
Benchmarks founders should know
- Healthy LTV:CAC ratio: 3:1 or higher - the widely used benchmark for a sustainable SaaS business
- Below 1:1: you lose money on every customer acquired
- Above 5:1: often a sign of underinvesting in growth
- CAC payback period: under 12 months is strong for early-stage SaaS
Frequently asked questions
What is a good LTV to CAC ratio?
The standard benchmark is 3:1 - lifetime value should be at least three times the cost of acquiring a customer. Below 1:1 you lose money on every customer; far above 5:1 can mean you are underinvesting in growth.
How do I calculate CAC?
Divide total sales and marketing spend for a period by the number of new customers acquired in that period. Include salaries and tools, not just advertising.
How do I calculate LTV for a SaaS startup?
Multiply average revenue per account by gross margin percentage, then by average customer lifetime in months (1 divided by the monthly churn rate). At $100 ARPA, 70% margin, and 5% monthly churn, LTV is $1,400.
What is the CAC payback period?
The number of months of gross-margin revenue it takes to recover the cost of acquiring a customer. Under 12 months is considered strong for early-stage SaaS; over 24 months strains cash.
Is this CAC vs. LTV calculator free?
Yes. The Accelerator.tools CAC vs. LTV calculator is completely free, requires no signup, and results can be shared via URL.
Last updated July 2026 by the Accelerator.tools editorial team. Explore more free tools in the calculator library or browse the community-voted tool directory.