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SaaS Unit Economics

SaaS LTV:CAC Calculator — Lifetime Value & Payback Period

Enter your ARPU, gross margin, monthly churn, and CAC to get customer lifetime value, your LTV:CAC ratio, and CAC payback period — the three numbers that actually tell you if your growth spend is working.

📈 Your SaaS Metrics

Formulas: Lifetime = 1 ÷ Churn. LTV = ARPU × Margin × Lifetime. Payback = CAC ÷ (ARPU × Margin).

📊 Unit Economics

Enter values and click Calculate
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Disclaimer: This calculator is for educational and planning purposes only. It assumes constant churn and margin, which real businesses rarely maintain exactly. Consult a financial advisor or use full cohort-based analysis for investment or fundraising decisions.

The Three Numbers That Actually Matter

Customer Lifetime is how long an average customer stays before churning — the mathematical inverse of your monthly churn rate.

Customer Lifetime (months) = 1 ÷ Monthly Churn Rate

LTV (Lifetime Value) is the total gross profit an average customer generates over their lifetime — using gross margin, not raw revenue, because hosting, support, and payment costs eat into what you actually keep.

LTV = ARPU × Gross Margin × Customer Lifetime

CAC Payback Period is how many months it takes for a customer's gross margin to repay what you spent acquiring them.

CAC Payback (months) = CAC ÷ (ARPU × Gross Margin)

Worked Example

ARPU ₹2,000/month, gross margin 80%, monthly churn 5%, CAC ₹8,000.

Benchmark Reference

MetricWeakHealthyExcellent
LTV:CAC RatioBelow 1:1 (losing money)3:15:1+
CAC Payback Period18+ months12 months5-7 months

Frequently Asked Questions

A commonly cited benchmark is 3:1 or higher — meaning a customer generates at least three times what it costs to acquire them. Below 1:1 means you lose money on every customer. Above roughly 5:1 can sometimes signal you're under-investing in growth rather than being efficient.
Many SaaS benchmarks target 12 months or less, with best-in-class companies achieving 5-7 months. Longer payback periods mean more cash is tied up before a customer becomes profitable, which matters more the tighter your cash runway is.
Revenue is not profit — hosting, support, and payment processing costs reduce what you actually keep from each customer. Multiplying by gross margin converts revenue-based lifetime value into a more accurate profit-based lifetime value.
Customer lifetime is the mathematical inverse of monthly churn (1 divided by churn rate) — a small change in churn has an outsized effect on lifetime value because it compounds. Cutting churn from 5% to 2.5% doubles average customer lifetime, and therefore roughly doubles LTV.