Try “wedding”, “budget”, “etsy” or “invoice”.

LTV Calculator: Customer Lifetime Value & LTV:CAC

Work out what a customer is worth, and how much you can afford to spend to win one.

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LTV & CAC Pink cells are yours to edit
B9=B2*B3%/B4%
ABC
Your numbers
ARPU
After hosting, support, fees
Customers lost each month
CAC
Results
Average customer lifetime (months)33.33
Customer lifetime value (LTV)$800.00
LTV : CAC43 or more is a common target
CAC payback (months)8.33
Most you can pay per customer at 3:1$266.67
LTV & CAC+ SaaS Financial Model & Startup Forecast

Estimates for planning and education only, not financial or tax advice. Always check current platform fees and your own numbers.

The LTV formula

For a subscription, customer lifetime value is the monthly revenue per customer, times your gross margin, divided by your monthly churn. At $30 a month, 80% margin and 3% churn, a customer is worth $30 × 80% ÷ 3% = $800 in gross profit.

1 ÷ churn is also the average customer lifetime in months: at 3% churn, about 33 months.

LTV:CAC and payback

LTV:CAC compares what a customer is worth with what it cost to win them. Many SaaS founders aim for 3 or more. CAC payback is how many months of gross profit it takes to earn back the acquisition cost; shorter means you can grow without running out of cash.

The formulas behind it

Every result cell is a plain spreadsheet formula, so you can check the math or rebuild it yourself.

CellResultFormula
B8Average customer lifetime (months)=1/B4%
B9Customer lifetime value (LTV)=B2*B3%/B4%
B10LTV : CAC=B9/B5
B11CAC payback (months)=B5/(B2*B3%)
B12Most you can pay per customer at 3:1=B9/3

Questions people ask

How do you calculate customer lifetime value?

For subscriptions: LTV = monthly revenue per customer × gross margin ÷ monthly churn. For stores: average order value × orders per year × years as a customer × margin.

What is a good LTV to CAC ratio?

3 to 1 is a common target. Below 1 you lose money on every customer; far above 5 you may be under-investing in growth.

Why use gross margin and not revenue?

Revenue overstates what a customer is worth. Hosting, support and payment fees come out of every dollar, so LTV based on gross profit is the number you can compare with CAC.

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