LTV to CAC calculator

LTV:CAC is the easiest SaaS metric to make look good. Use revenue instead of gross margin and divide by a low churn rate, and a mid-market customer is suddenly worth thirteen years of revenue. This calculator uses gross margin, caps the implied lifetime at a limit you can defend, and shows the capped and uncapped ratios side by side so nobody mistakes an assumption for a result.

Category:: RevOps Metrics & Reporting
Formats:: CSV + web view
Sections:: 6
Updated:: September 24, 2026

What you get

A segment calculator for LTV and LTV:CAC on gross margin
A lifetime cap with capped and uncapped ratios shown together
Formulas in plain arithmetic with a worked example
A revenue vs gross margin comparison showing how much revenue-based LTV overstates
A sanity-check checklist before the ratio goes in a deck

Who it's for

RevOps and finance teams building unit economics
Founders and CROs preparing investor metrics
Growth leaders comparing segments for investment

What's inside

1
LTV:CAC by segment
10 columns, 3 worked example rows
2
Formulas
3 columns, 5 worked example rows
3
Revenue vs gross margin LTV
4 columns, 2 worked example rows
4
Assumptions
5 fields to complete
5
Sanity checks before you report
7-point checklist
6
Why the lifetime assumption decides the answer
Guidance notes

Preview of section 1

LTV:CAC by segment

Worked example with a 60-month lifetime cap. Inputs are illustrative; use your own churn, margin, and CAC.

Segment	Monthly revenue per account	Gross margin	Monthly revenue churn	Implied lifetime (months)	Lifetime used (cap 60)	LTV	CAC	LTV:CAC	Uncapped LTV:CAC
SMB	500	80%	2.5%	40	40	16,000	6,000	2.7x	2.7x
Mid-market	2,000	80%	1.0%	100	60	96,000	30,000	3.2x	5.3x

The preview shows part of section 1. The full template has all 6 sections (5 not previewed here), with blank rows ready to fill in. Download the full template

How to use it

1
Use gross margin, not revenue
LTV is the profit a customer returns, not the revenue. Multiply monthly revenue per account by gross margin from finance before multiplying by lifetime.
2
Derive lifetime from churn, then cap it
Implied lifetime in months = 1 / Monthly revenue churn rate. At 1% monthly churn that is 100 months, more than eight years. Cap it at a period you can defend, such as 60 months, unless you have retention history that long.
3
Use CAC from the same segment
Pair each segment's LTV with that segment's fully loaded CAC. Blended CAC against segment LTV gives meaningless ratios.
4
Show both ratios when the cap binds
If the cap changes the answer, show capped and uncapped side by side and state the cap. That makes the assumption visible to anyone reading the number.

Frequently asked questions

How do you calculate LTV to CAC?

LTV = Monthly revenue per account x Gross margin x Lifetime in months, where lifetime = 1 / Monthly revenue churn. Divide LTV by fully loaded CAC. With 2,000 per month, 80% margin, 60 months, and 30,000 CAC, LTV:CAC is 3.2x.

Should LTV use revenue or gross margin?

Gross margin. LTV is meant to compare the profit a customer returns with the cost to acquire them. Revenue-based LTV overstates the ratio by the inverse of your gross margin.

What is a good LTV:CAC ratio?

3x is a widely repeated rule of thumb, not a benchmark. What counts as good depends on your payback period, cash position, and how reliable your lifetime assumption is. Compare against your own history.

Why cap customer lifetime in LTV?

Low churn rates imply lifetimes longer than most companies have existed. Capping lifetime at a period supported by your retention history keeps LTV from being driven by extrapolation.

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