SaaS Churn Rate & LTV:CAC Calculator
Calculate monthly churn rate, customer lifetime value (LTV), customer acquisition cost (CAC), and your LTV:CAC ratio from your own SaaS metrics.
LTV uses the standard shorthand model: ARPU × Gross Margin ÷ Monthly Churn Rate. This assumes a constant churn rate and revenue per customer over time — treat it as a directional planning estimate, not a forecast guarantee.
About this tool
How to use it
- Enter your total active customers at the start of the month, and how many of them churned during the month.
- Enter your monthly recurring revenue (MRR) and your gross margin — the percentage of revenue left after direct costs like hosting and support.
- Enter what you spent on sales and marketing this month, and how many new customers that spend brought in.
- Click Calculate LTV & CAC. Read the LTV:CAC ratio banner first — that single number tells you whether your unit economics work before you look at anything else.
Why it matters
LTV and CAC only mean something next to each other. A $2,000 customer lifetime value sounds great until you learn it costs $3,000 to acquire that customer — you're losing money on every signup, and growth just makes that worse faster. The LTV:CAC ratio (most investors and operators use 3:1 as the healthy threshold) is the fastest gut-check on whether a SaaS business's growth engine is actually profitable, or just burning cash to look big.
When to use it
Before a board meeting or investor update, when someone is going to ask what your unit economics look like. When you're deciding whether to increase ad spend or a sales team's budget, and need to know if today's acquisition cost is even sustainable. When your churn ticks up and you want to see exactly how much it drags down customer lifetime value.
Good to know
This uses the standard shorthand LTV model — ARPU × gross margin ÷ monthly churn rate — which assumes churn and revenue per customer stay roughly constant over a customer's lifetime. It's a directional planning number, not a discounted-cash-flow forecast: if your churn is trending down or your ARPU grows with upsells, real LTV will run higher than this estimate, and vice versa. CAC here is a blended figure (total S&M spend ÷ total new customers) — it doesn't separate paid, organic, or sales-assisted acquisition, which can have very different real costs.
Common questions
What is a good LTV:CAC ratio for a SaaS company?
3:1 or higher is the widely-used benchmark for a healthy, efficient SaaS business — it means a customer is worth roughly three times what it cost to acquire them. Below 3:1 usually means growth is too expensive to scale; above 5:1 can actually mean you're under-investing in growth and leaving market share on the table.
What's the difference between LTV and revenue per customer?
Revenue per customer (ARPU) is what a customer pays you in a given period. LTV projects that forward across their entire relationship with you, adjusted for gross margin (so you're valuing profit, not gross revenue) and for how long they're likely to stay, based on your churn rate. A customer paying $100/month who typically stays 20 months is worth far more than their single month's payment.
Where does the LTV formula come from?
This calculator uses ARPU × gross margin ÷ monthly churn rate, the standard shorthand used across SaaS finance and by most VC-facing metrics dashboards. It's derived from modelling churn as a constant monthly probability, which makes customer lifetime mathematically equal to 1 ÷ churn rate — a good approximation for stable, mature customer cohorts, less accurate for a brand-new product with an unstable churn curve.
My CAC Payback Period is over 12 months — is that bad?
It depends on how you're funded. Under 12 months is generally considered efficient and is common for self-serve or low-touch SaaS. 12–18 months is workable for venture-backed companies with runway to spare. Beyond 18–24 months, you're tying up a lot of cash per customer before it pays back, which is riskier if growth or funding slows down.