LTV to CAC Payback Calculator

About this calculator

The LTV:CAC ratio compares customer lifetime value — ARPA multiplied by gross margin and divided by the churn rate — against customer acquisition cost, and it is the single most-watched unit economics metric in SaaS. A ratio near 3:1 is the widely cited healthy benchmark: below that, growth is expensive relative to what customers are worth; well above it (say 7:1 or higher), a company may actually be under-investing in growth. The CAC payback period, calculated as CAC divided by monthly revenue per account times gross margin, answers a related but distinct question: how many months of a customer's margin it takes just to recoup what was spent acquiring them.

SaaS founders track both figures when setting sales and marketing budgets, and investors scrutinize them during fundraising and due diligence because they reveal whether growth is capital-efficient or is being bought at an unsustainable price. A strong LTV:CAC ratio with a long payback period can still strain cash flow, which is why the two numbers are usually read together rather than in isolation.

This calculator takes your average revenue per account, gross margin, monthly churn rate and customer acquisition cost, and returns both the LTV:CAC ratio and the CAC payback period in months, so you can see your unit economics the way a SaaS operator or investor would.