Free tool LTV:CAC ratio calculator
The LTV:CAC ratio compares what a customer is worth over their lifetime with what it cost to win them. Build LTV from monthly revenue, gross margin and churn (or paste your own), add CAC, and read the ratio next to the months it takes to earn the CAC back.
- Ratio and payback together
- Updates as you type
- Runs locally
Compare lifetime value with acquisition cost
All amounts are per customer and the rates are monthly. The target ratio is yours to set; it only drives the "CAC at target" line.
Recurring revenue ÷ paying customers, per month.
Revenue left after the cost of serving customers. Leave empty for revenue LTV.
Share of customers lost each month. Must be above 0%.
Your own LTV figure, ideally gross margin per customer.
Optional: needed for payback months.
Sales and marketing cost ÷ new paying customers, same period.
For the "CAC at target ratio" line. Example: 3 for 3 : 1.
LTV:CAC ratio
3.20×
Lifetime value ÷ acquisition cost. 3.00× reads as 3 : 1.
Share these inputs: the values go after the # in the link, so they never reach a server.
https://tapcub.com/tools/ltv-cac-ratio-calculator
Version v1.0Updated Update history
Two numbers, read together
The ratio says whether a customer is worth acquiring. Payback says how long your cash is tied up before you find out. A good ratio with a long payback can still run you out of money.
LTV:CAC ratio
How many times over a customer repays their acquisition cost. $800 of lifetime gross profit against a $250 CAC is 3.2 : 1. Below 1 : 1, each customer loses money.
CAC payback
Months of gross profit needed to recover CAC: $250 ÷ $32 a month is 7.8 months. Use the CAC payback calculator to add churn and expansion month by month.
Expected lifetime
1 ÷ monthly churn. With constant churn the ratio is simply lifetime ÷ payback: 25 months ÷ 7.8 months ≈ 3.2. Lower churn or faster payback are the only two levers.
CAC at target ratio
LTV ÷ the ratio you choose. It turns the ratio into a spending ceiling per customer, which is easier to hand to whoever sets the budget.
LTV from a churn rate assumes churn stays constant. For young products with little history, check the result against cohort data before raising budgets on it.
Three steps
Each input has its own calculator if you need to work it out first.
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1
Get LTV
Monthly revenue per customer, gross margin and monthly churn; the churn rate calculator gives churn. Or switch mode and enter an LTV you already use.
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2
Get CAC
All sales and marketing cost for a period ÷ new paying customers in that period, from the CAC calculator. Use paid CAC per channel when comparing channels.
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3
Read ratio and payback together
Set a target ratio to see the CAC ceiling. Check that the payback fits the cash you have.
LTV:CAC = (ARPA × gross margin ÷ churn) ÷ CAC
Lifetime value uses the same simple model as the customer lifetime value calculator: constant monthly revenue and a constant share of customers leaving each month.
- LTV = ARPA × gross margin ÷ monthly churn; payback = CAC ÷ (ARPA × gross margin)
- With constant churn: LTV:CAC = expected lifetime ÷ payback months
- Use margin-based LTV and fully loaded CAC (salaries, tools, agencies), from the same period
LTV
LTV = ARPA × margin ÷ churn
$40 × 80% ÷ 4% → $800
Ratio
LTV:CAC = LTV ÷ CAC
$800 ÷ $250 → 3.2 : 1
Payback
months = CAC ÷ (ARPA × margin)
$250 ÷ $32 → 7.8 months
Same product, three acquisition channels
A $40-a-month tool with 80% gross margin. Customers from each channel churn at different rates and cost different amounts to win.
| Channel | Monthly churn | LTV | CAC | LTV:CAC | Payback |
|---|---|---|---|---|---|
| Content and SEO | 3% | $1,067 | $150 | 7.1 : 1 | 4.7 months |
| Paid search | 4% | $800 | $300 | 2.7 : 1 | 9.4 months |
| Paid social | 6% | $533 | $420 | 1.3 : 1 | 13.1 months |
Paid social clears 1 : 1, but only just: its customers stay about 17 months on average and take 13 of them to pay back. A blended ratio across all three channels would hide that. Sample figures.
How the ratio gets flattered
Almost every error pushes the ratio up.
Revenue LTV against full CAC
Lifetime revenue overstates what a customer is worth. Compare margin LTV with CAC, or say clearly which you used.
Ad spend only as CAC
Leaving out salaries, tools and agencies makes CAC look small. The ratio is only as honest as its denominator.
Early churn taken as permanent
A 1% churn rate from your first enthusiastic customers implies a 100-month lifetime. Cap the lifetime or wait for cohorts.
One blended ratio
Organic customers lift the average. A channel with a ratio below 1 : 1 can hide inside a healthy-looking blend.
The inputs, per account and per channel
TapCub does not compute LTV:CAC for you, but it holds the pieces: the B2B SaaS template reads subscription revenue and cancellations from your billing events, and marketing analytics keeps the channel each customer came from.
LTV:CAC questions
Still have a question?
Chat with the team behind TapCub — we usually reply within a few hours on business days.
How do I calculate the LTV:CAC ratio?
Divide customer lifetime value by customer acquisition cost. With $40 a month, 80% gross margin and 4% monthly churn, LTV is $40 × 0.8 ÷ 0.04 = $800; with a $250 CAC the ratio is 3.2 : 1.
What is a good LTV to CAC ratio?
Higher than 3 is a commonly cited guideline. One widely quoted source is David Skok's SaaS Metrics 2.0, which says the strongest SaaS businesses are above 3. In his detailed definitions he adds that the guideline assumes LTV without a gross-margin adjustment and a gross margin of 80% or more, so a margin-based ratio sits lower for the same business. It is a rule of thumb, not a measured benchmark.
Should LTV use revenue or gross margin?
Gross margin, because acquisition is paid out of margin. If you compare against a guideline built on revenue LTV, such as Skok's, convert first: at 80% margin, 3 : 1 on revenue is 2.4 : 1 on margin.
Can the ratio be too high?
Yes, in the sense that a very high ratio can mean you are spending less on growth than you could afford. The "CAC at target ratio" line shows how much more you could spend per customer.
What is the link between LTV:CAC and CAC payback?
With constant churn, LTV:CAC = expected lifetime ÷ payback months. A 25-month lifetime and an 8-month payback give about 3 : 1. The ratio says whether a customer pays back; payback says when.
How do I get CAC for one channel?
Spend on that channel (plus its share of people and tools if you can attribute them) ÷ paying customers it brought. TapCub's marketing reports keep the source on each customer so you can count them.
Update history
New features, fixes and data refreshes for this tool, newest first.
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· v1.0
LaunchedFirst release.
Missing something or found an error? Tell us — requests that come up often go into the next update. All tool updates
Put subscriptions and channels on one board
The B2B SaaS template follows accounts from signup to subscription, with MRR and churn from your billing events.