Operator Math
sales

LTV:CAC Calculator

Estimate customer lifetime value, acquisition efficiency, and CAC limits.

Question answered

Can acquisition spend scale profitably, or should unit economics be fixed first?

Numbers needed

Average monthly revenue per customer, Gross margin, Monthly churn, Customer acquisition cost, Average customer lifespan, Expansion revenue, Annual discount rate

Inputs

Show guidance for Average monthly revenue per customer

Enter recurring or repeat monthly revenue per customer.

$
Show guidance for Gross margin

Enter gross margin after direct service or product cost.

%
Show guidance for Monthly churn

Enter expected monthly logo churn.

%
Show guidance for Customer acquisition cost

Enter fully loaded sales and marketing cost to acquire one customer.

$
Show guidance for Average customer lifespan

Enter known lifespan if more reliable than churn-derived lifespan.

Required when monthly churn is 0%; otherwise churn estimates lifespan automatically.
Show guidance for Expansion revenue

Enter expected monthly expansion revenue rate.

%
Show guidance for Annual discount rate

Enter discount rate for future contribution, if using present-value thinking.

%

Outputs

Good

Primary outputs

Net LTV$4,000.00

Lifetime gross profit after margin, expansion, churn, and discount assumptions.

LTV:CAC ratio4

Net lifetime value divided by CAC.

Supporting outputs

Estimated customer lifespan50

Estimated months a customer remains active.

Gross LTV$5,000.00

Lifetime revenue before gross margin adjustment.

CAC payback months12.5

Months to recover CAC from gross profit.

Contribution after CAC$3,000.00

Lifetime gross profit remaining after CAC.

Allowable CAC at target ratio$1,333.33

CAC that would keep the modeled target ratio intact.

Target CAC for 3:1 ratio$1,333.33

CAC that would produce a 3:1 LTV:CAC ratio.

Recommended next move

Good

LTV:CAC is at or above target

The model returns 4x LTV:CAC, leaving room to acquire customers within the 3:1 target.

CAC is the limiting lever

Unit economics are most sensitive to acquisition cost. Keep CAC within the allowable cap or improve conversion efficiency.

CAC is within the 3:1 target

At this net LTV, CAC can be up to $1,333.33 while maintaining a 3:1 LTV:CAC ratio.

Churn sensitivity

Compare how the result changes when a key assumption moves.

Monthly churnEstimated lifespanNet LTVLTV:CAC
1%100$8,000.008
1.5%66.7$5,336.005.34
2%50$4,000.004
2.5%40$3,200.003.2
3%33.3$2,664.002.66

Operator context

Use this when

  • Use before increasing acquisition budget.
  • Use to compare acquisition channels, cohorts, and customer segments.
  • Use when churn, gross margin, or CAC changes could alter growth quality.

Interpretation rules

Ratio needs paybackWarning

A healthy LTV:CAC ratio can still be cash constrained if payback is too slow.

Fix before scalingCritical

Low LTV:CAC should trigger churn, margin, pricing, or CAC work before spend increases.

Operator notes

  • Use cohort and channel-level inputs where possible; blended metrics can hide unprofitable growth.
  • Pair LTV:CAC with CAC payback and runway before scaling.

Watch for

  • Using revenue LTV instead of margin-adjusted LTV overstates acquisition capacity.
  • Assuming stable churn in early cohorts can make lifetime value too optimistic.

References

Follow-on calculators