# LTV:CAC ratio and CAC payback calculator: unit economics health check

> LTV:CAC compares the gross profit a customer brings over their lifetime with the cost of acquiring them; 3:1 or better is the commonly cited target. CAC payback is CAC ÷ monthly gross profit per customer — ideally under 12 months. Because some customers churn before paying back, the churn-adjusted payback, which counts only customers who remain, is longer than the simple figure.

- Interactive version: https://infikeytechnologies.com/tools/ltv-cac-ratio-calculator
- Type: free instant calculator
- Category: SaaS
- Last reviewed: 2026-10-05
- Publisher: Infikey Technologies (https://infikeytechnologies.com)

## Example result (default inputs)

| Input | Value |
| --- | --- |
| Currency | USD ($) |
| Customer acquisition cost (CAC) | 1,200 |
| Monthly revenue per customer | 150 |
| Gross margin | 75% |
| Monthly churn | 2.5% |

**LTV:CAC ratio: 3.8:1.** LTV is $4,500 against a CAC of $1,200 — an LTV:CAC ratio of 3.8:1, with CAC paid back in 10.7 months.

Healthy unit economics: 3.8:1 LTV:CAC and 10.7-month payback. You can likely invest more in growth.

| Metric | Value |
| --- | --- |
| Customer lifetime value (gross profit) | $4,500 |
| CAC payback (simple) | 10.7 months |
| CAC payback (churn-adjusted) | 13 months |
| Monthly gross profit per customer | $113 |
| Churn needed for 3:1 | 3.13% a month |
| Maximum CAC for 3:1 | $1,500 |

### Cumulative gross profit per acquired customer (churn-adjusted)

| Item | Value | Detail |
| --- | --- | --- |
| CAC to recover (selected) | $1,200 |  |
| Month 6 | $634 |  |
| Month 12 | $1,179 |  |
| Month 18 | $1,647 |  |
| Month 24 | $2,049 |  |
| Month 30 | $2,395 |  |
| Month 36 | $2,691 |  |

- Churn-adjusted payback weights each month by the share of customers still subscribed, so it is the more conservative figure.

Open this result on the website: https://infikeytechnologies.com/tools/ltv-cac-ratio-calculator?currency=USD&cac=1200&arpa=150&margin=75&churn=2.5

## Use from a link or API

Add these query parameters to https://infikeytechnologies.com/tools/ltv-cac-ratio-calculator (pre-filled page), https://infikeytechnologies.com/tools/ltv-cac-ratio-calculator.md (this plain-text page) or https://infikeytechnologies.com/api/tools/ltv-cac-ratio-calculator (JSON).

| Parameter | Meaning | Accepted values |
| --- | --- | --- |
| `currency` | Currency | one of USD, INR, AED, GBP, EUR |
| `cac` | Customer acquisition cost (CAC) | number from 0 to 100000000 (in the chosen currency), default 1200 |
| `arpa` | Monthly revenue per customer | number from 0 to 10000000 (in the chosen currency), default 150 |
| `margin` | Gross margin | number from 1 to 100 (%), default 75 |
| `churn` | Monthly churn | number from 0.01 to 100 (%), default 2.5 |

- Healthy SMB SaaS: https://infikeytechnologies.com/tools/ltv-cac-ratio-calculator?currency=USD&cac=900&arpa=120&margin=80&churn=2
- High-churn product: https://infikeytechnologies.com/tools/ltv-cac-ratio-calculator?currency=USD&cac=400&arpa=40&margin=70&churn=7
- Enterprise SaaS: https://infikeytechnologies.com/tools/ltv-cac-ratio-calculator?currency=USD&cac=40000&arpa=3000&margin=85&churn=0.8

## How it is calculated

- **LTV**: monthly revenue × gross margin ÷ monthly churn
- **LTV:CAC**: LTV ÷ CAC
- **Simple CAC payback**: CAC ÷ (monthly revenue × gross margin)
- **Churn-adjusted payback**: first month where Σ monthly gross profit × (1 − churn)^(month − 1) ≥ CAC

## Reading the two numbers together

| LTV:CAC | Payback | What it usually means |
| --- | --- | --- |
| Above 3:1 | Under 12 months | Efficient growth — invest more |
| Above 3:1 | Over 12 months | Profitable but cash-hungry — push annual plans |
| 1:1 to 3:1 | Any | Fix churn, pricing or acquisition cost before scaling |
| Below 1:1 | Any | Every customer loses money |
| Far above 5:1 | Very short | Possibly under-investing in growth |

## Levers that improve unit economics

- Lower churn — it raises LTV directly and is often the biggest lever.
- Raise prices or add paid tiers to lift revenue per customer.
- Improve gross margin through cheaper hosting and support automation.
- Shift acquisition to channels with lower CAC, such as SEO and referrals.
- Sell annual plans paid up front to shorten cash payback.

## FAQ

### What is a good LTV to CAC ratio?

3:1 or higher is the widely used benchmark: each customer brings at least three times their acquisition cost in gross profit.

### What is CAC payback period?

The number of months of gross profit needed to recover the cost of acquiring a customer: CAC ÷ (monthly revenue × gross margin).

### What is a good CAC payback period?

Under 12 months is a common target for SaaS selling to small and mid-sized businesses; enterprise products often accept longer.

### Why is churn-adjusted payback longer?

Some customers cancel before they have paid back their acquisition cost, so on average it takes longer to recover CAC across a cohort.

## Get expert help

Send these results to an Infikey Technologies specialist from the form on https://infikeytechnologies.com/tools/ltv-cac-ratio-calculator#estimate or via https://infikeytechnologies.com/contact.

More free calculators: https://infikeytechnologies.com/tools.md

## Disclaimer

This calculator is provided free for general information and planning only. Results are estimates based on the inputs you enter and the assumptions described on this page, reference data such as published prices may change, and actual costs and outcomes will differ. Nothing on this page is financial, legal, tax, investment or other professional advice. Infikey Technologies Private Limited, Infikey Technologies LLC and their directors, employees and affiliates make no warranty, express or implied, about the accuracy, completeness or suitability of this tool or its results, and accept no liability for any loss or damage, direct or indirect, arising from its use or from reliance on its results. Verify all figures independently and seek professional advice before making any decision. Use of this tool is at your own risk.