SaaS & retention
LTV to CAC Ratio Calculator
Compare contribution-based customer lifetime value with acquisition cost using matching customer and cost definitions.
Use this when you already have an LTV estimate and CAC. Use the customer lifetime value calculator first if you need a simplified recurring-revenue LTV estimate.
What the result means
The ratio shows expected lifetime contribution relative to acquisition investment. A ratio above 1x is not a guarantee of company profitability or fast cash recovery, and no universal target fits every business.
The formula
Customer lifetime value / customer acquisition cost
Results are displayed to at most two decimal places. Calculations use the unrounded inputs.
A worked example
Put the formula to work
- Customer lifetime value (currency per customer)
- 1,800
- Customer acquisition cost (currency per customer)
- 600
Lifetime contribution per unit of acquisition cost: 3x
Expected lifetime contribution of 1,800 divided by CAC of 600 gives a 3x LTV:CAC ratio.
How to use this calculator
- Choose a customer segment and acquisition cohort.
- Estimate lifetime contribution with a documented retention model.
- Match the segment to its fully scoped acquisition cost.
- Divide LTV by CAC and review payback timing separately.
Why this number matters
The ratio helps compare acquisition investment with the long-run contribution expected from acquired customers, not simply their first invoice.
Input definitions
- Customer lifetime value (currency per customer)
- Expected lifetime contribution per customer, preferably net of service costs rather than gross revenue.
- Customer acquisition cost (currency per customer)
- Fully scoped acquisition cost for the same type of customer; must be greater than zero.
Assumptions and limitations
- Sensitive to LTV assumptions, especially for young cohorts with little retention history.
- Does not express how long it takes to recover CAC.
- Revenue LTV and contribution LTV produce materially different ratios; do not mix them.
Methodology
The default result and worked example use the same calculation functions as the interactive tool. The formula cannot verify the quality or scope of your source data.
Read our calculation methodology
Last updated .