Business
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FAQs
What is a healthy LTV:CAC ratio?
Many SaaS teams target at least 3:1, but the ideal ratio depends on growth stage, margin profile, and payback constraints.
How to Use the LTV/CAC Calculator
- Enter ARPU, gross margin, churn, and CAC.
- Review LTV, LTV:CAC ratio, and payback months.
- Stress-test assumptions with higher churn or lower margin.
Unit Economics Formulas
LTV
LTV = (ARPU Ã Gross margin) / Monthly churn
CAC Payback
Payback months = CAC / (ARPU Ã Gross margin)
Use Cases
Board reporting
Track payback and efficiency trends.
Channel optimization
Compare paid acquisition performance by CAC.
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