SaaS LTV, CAC & pricing calculator
Model LTV, CAC, LTV:CAC and payback from your price, gross margin, churn and acquisition spend, then see how one cohort pays back over 24 months and what a price change would do.
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Revenue
Per paying account, per month.
Average revenue per account, after discounts
Revenue minus hosting, third-party APIs, payment fees and support. SaaS is often 70–85%.
Churn
Share of customers who cancel.
Equals about 30.6% a year (compounded, not ×12).
Acquisition cost (CAC)
Fully loaded: include salaries, not just ad spend
Expansion revenue
Upgrades and seats added by customers who stay.
Excluded: LTV uses today's price only, the conservative way to plan.
Unit economics
LTV : CAC
3.3:1
Each customer returns at least three times what it cost to win.
Lifetime value (LTV)
$1,307
Gross profit per customer, lifetime
CAC
$400
Entered directly
Customer lifetime
33.3
months, = 1 ÷ monthly churn
CAC payback
10.2
months of gross profit to earn back CAC
≥ 3:1 healthy · 1–3:1 watch · under 1:1 losing money · payback ≤ 12 months is a common target
One cohort of 100 customers, 24 months
How a single month's sign-ups pay back as churn takes its share.
| 1 | $4.9K |
|---|---|
| 2 | $4.8K |
| 3 | $4.6K |
| 4 | $4.5K |
| 5 | $4.3K |
| 6 | $4.2K |
| 7 | $4.1K |
| 8 | $4.0K |
| 9 | $3.8K |
| 10 | $3.7K |
| 11 | $3.6K |
| 12 | $3.5K |
| 13 | $3.4K |
| 14 | $3.3K |
| 15 | $3.2K |
| 16 | $3.1K |
| 17 | $3.0K |
| 18 | $2.9K |
| 19 | $2.8K |
| 20 | $2.7K |
| 21 | $2.7K |
| 22 | $2.6K |
| 23 | $2.5K |
| 24 | $2.4K |
Still paying at month 24
50
of 100 customers
24-month revenue
$84,702
24-month gross profit
$67,761
Counting churn, the cohort earns back its $40.0K acquisition cost in month 12, against 10.2 months on the simple formula.
Price sensitivity
Same churn and CAC, different price. In reality price moves both, so test it.
| Price | ARPA | LTV | LTV:CAC | Payback |
|---|---|---|---|---|
| -20% | $39.20 | $1,045 | 2.6:1 | 12.8 mo |
| -10% | $44.10 | $1,176 | 2.9:1 | 11.3 mo |
| Current | $49.00 | $1,307 | 3.3:1 | 10.2 mo |
| +10% | $53.90 | $1,437 | 3.6:1 | 9.3 mo |
| +20% | $58.80 | $1,568 | 3.9:1 | 8.5 mo |
A model, not a forecast. Every input is an editable assumption; use real numbers from your billing system and recalculate as they change. Early-stage churn is noisy, so do not over-read a single month.
How it works
How to use the saas ltv, cac & pricing calculator
- 01
Enter price and margin
Your average revenue per account per month and your gross margin after hosting, APIs, payment fees and support.
- 02
Add churn
Monthly or annual, whichever you track. Annual churn is converted to monthly properly, not divided by 12.
- 03
Set acquisition cost
Type CAC directly, or switch on the toggle to work it out from monthly sales and marketing spend ÷ new customers.
- 04
Read the health check
LTV, LTV:CAC with a status, CAC payback, a 24-month cohort chart and how each metric moves if you change price.
The SaaS unit economics formulas
Unit economics answer one question: does each customer return more than it costs to win? Five numbers do most of the work:
- Monthly churn from annual:
1 − (1 − annual)^(1/12) - Customer lifetime =
1 ÷ monthly churn - LTV =
ARPA × gross margin ÷ monthly churn - LTV:CAC =
LTV ÷ CAC - CAC payback (months) =
CAC ÷ (ARPA × gross margin)
A worked example with the defaults: $49 a month at an 80% gross margin is $39.20 of gross profit per customer per month. At 3% monthly churn the average customer stays about 33 months, so LTV is about $1,307. With a $400 CAC that is an LTV:CAC of 3.3:1, and it takes 10.2 months of gross profit to earn the $400 back.
Benchmarks: the 3:1 rule and 12-month payback
Two rules of thumb come up in almost every investor conversation. An LTV:CAC of at least 3:1 suggests the business can afford to keep acquiring customers, and a CAC payback of 12 months or less means growth does not swallow all your cash. Neither is a law; both are good sanity checks.
| LTV:CAC | What it usually means |
|---|---|
| Below 1:1 | Each customer loses money. Fix retention, price or acquisition before spending more. |
| 1:1 to 3:1 | Profitable per customer but thin. Growth will strain cash. |
| 3:1 to 5:1 | Healthy. Room to invest in acquisition. |
| Above 5:1 | Very efficient, or you may be growing slower than you could afford to. |
Why the simple payback is optimistic
The CAC payback formula assumes the customer is still paying in every month until payback. In reality some churn first. The cohort chart follows 100 customers month by month as churn takes its share. In the default example the simple formula says 10.2 months, but the cohort only earns back its $40,000 of acquisition cost in month 12, and by month 24 about half the cohort is still paying. That gap widens as churn rises.
Annual vs monthly churn
Dividing annual churn by 12 understates the monthly rate, because each month's losses come from a smaller base. 30% a year is 2.93% a month, not 2.5%. The calculator converts properly in both directions when you switch between them.
Where expansion revenue fits
Expansion revenue (upgrades, extra seats, growing usage) offsets churn. Add 1% monthly expansion per retained customer to the default example and LTV rises from about $1,307 to about $1,931, because the effective denominator shrinks from 3% to roughly 2%. That is why seat-based and usage-based products can afford higher acquisition costs. It is also why the formula breaks when expansion outpaces churn, so the calculator caps LTV at ten years of gross profit instead of showing infinity.
Common mistakes
- LTV on revenue. At an 80% margin, revenue-based LTV is 25% too high. With heavy AI or API costs, margins can be far lower, and the overstatement much worse.
- CAC on ad spend only. A fully loaded CAC includes sales and marketing salaries, tools and agencies, not just the media budget.
- Trusting early churn. Three months of data from your first 40 customers is noise. Re-run the numbers as cohorts age.
- Counting hoped-for expansion. Include upgrades you already see, not the ones on the roadmap.
Price is often the biggest lever
Holding churn and CAC constant, a 10% price rise lifts LTV by 10% and shortens payback, here from 10.2 to 9.3 months. In practice a price change also moves conversion and churn, which is why the sensitivity table is a starting point for a pricing test, not a decision. A clear pricing page does a lot of that work; see the best SaaS pricing pages for patterns that convert, and read up on retention and activation, the two levers that move churn most.
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Common questions
SaaS LTV, CAC & pricing calculator: FAQ
LTV = ARPA × gross margin ÷ monthly churn. With $49 a month, an 80% margin and 3% monthly churn, each customer generates $39.20 of gross profit a month and stays about 33 months on average, so LTV is about $1,307. Use gross profit, not revenue.
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