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SaaS Value Calculator (LTV : CAC) Calculator

Resolve startup economics. Precise engine for evaluating Customer Acquisition Cost against Lifetime Value to determine unit profitability and churn sustainability.

Problem Parameters
Customer Acquisition Expense
$
Revenue & Retention Model
$
%
%

Percentage of total customers who cancel their subscription every month.

Cost to Acquire Customer (CAC): $ 100.00
Average Customer Lifespan: 20.0 Months
Gross Lifetime Value (LTV): $ 800.00
Time to Recover CAC (Payback): 2.5 Months
Health Ratio (LTV:CAC): 8.0 x
VENTURE FUNDABLE: A ratio > 3.0x indicates highly efficient growth. The engine generates significantly more margin from a user than it costs to acquire them.
Solution
LTV : CAC Ratio
3.0x
Recurring
Growth Model
Cashflow Cash
Burn Metric
Comprehensive Guide

SaaS Economics: The Danger of Churn

Understand why acquiring thousands of users means nothing if your monthly churn outpaces your CAC. Learn the silicon valley mathematics of recurring revenue.

Customer Acquisition Cost (CAC)

CAC calculates exactly how much money you burn in Sales salaries and Marketing ads to secure one paying user. If your Facebook Ad budget is $10k and you get 100 users, your CAC is exactly $100 per user.

The Churn Multiplier (Lifetime Value)

If your user pays you $10 a month, but cancels after 3 months (High Churn), their Total Lifetime Revenue is only $30. If your CAC was $100, you lose $70 on every single customer you acquire. Scaling this business will bankrupt you instantaneously.

LTV (Lifetime Value) is heavily reliant on gross margin. If a user brings in $10 a month, but it costs you $2 in AWS server fees to host them (Gross Margin 80%), their true monthly value is $8. LTV is strictly calculated against Margin, not gross revenue.

The Golden Rules of SaaS

  1. LTV : CAC Ratio must be > 3:1. This means for every $1 you spend on ads, that user will eventually generate $3 of pure gross margin before they cancel. Anything lower than a 3 ratio rarely survives overhead costs (engineering, rent, legal).
  2. CAC Payback Period must be < 12 Months. If you spend $500 to acquire a user, but they only yield you $10/mo in margin... it takes 50 months (over 4 years) just to break even on the ad spend. This crushes your short-term cash flow and limits operating runways. Target a 6-month payback.