LTV:CAC Calculator
LTV to CAC calculator for SaaS unit economics
Calculate LTV:CAC ratio and see whether your customer lifetime value justifies acquisition spend.
Formula: LTV:CAC = (ARPA × gross margin % / churn %) / CAC
Why LTV:CAC matters
LTV:CAC shows whether you earn enough lifetime gross profit on a customer to justify what you spend to acquire them. It is a core unit-economics check before scaling paid acquisition.
Common mistakes
Founders often understate CAC (missing sales salaries) or overstate LTV (ignoring churn and gross margin). Bad inputs make a 3:1 ratio look healthy when the business is not.
How Monter Pulse helps
Monter Pulse calculates LTV:CAC alongside CAC payback, NRR, runway, and burn so you see acquisition efficiency in the context of cash survival — not as an isolated spreadsheet cell.
FAQ
What is a good LTV:CAC ratio?
Many SaaS teams target 3:1 or better. Below 1:1 means you lose money on every customer; between 1–3 needs investigation before scaling spend.
Should I use logo churn or revenue churn?
Logo churn is common for simple LTV models; revenue churn and NRR are better when expansion matters. Be explicit in board materials.
How does NRR affect LTV?
Strong net revenue retention increases effective LTV because expansion offsets churn. High NRR can support higher CAC.