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Customer lifetime value with the optional LTV:CAC ratio every investor will compute when they see your model. LTV = (ARPC/12) × gross margin × customer lifetime, where lifetime is the reciprocal of monthly churn. Add a CAC and the calculator classifies the ratio into the industry-standard bands (>5× exceptional · 3-5× healthy · 2-3× OK · 1-2× suspect · <1× bad).
LTV is the total gross profit a customer will produce over the time they stay subscribed. Simple formula: (annual ARPC / 12) × gross margin × customer lifetime in months, where customer lifetime = 1 / monthly churn rate. So a $12k/yr customer at 75% GM and 2% monthly churn produces ~$37,500 of LTV over a 50-month average lifetime.
Industry consensus (SaaStr, ICONIQ, Bessemer): >5× exceptional (likely under-investing in growth), 3-5× healthy (the textbook target), 2-3× OK (typical at growth stage, watch margin/churn), 1-2× suspect (each customer barely profitable), <1× bad (losing money per customer). The 3× number is the most-cited target — it builds in margin for CAC inflation and lengthening payback at scale.
Churn is the single biggest LTV lever. Lifetime is 1/monthly_churn, so dropping monthly churn from 3% to 1.5% doubles the lifetime (33 → 67 months) and doubles the LTV. ARPC and gross margin improvements are linear; churn improvements are hyperbolic. Most SaaS efficiency gains come from churn reduction, not pricing or cost cutting.
When churn isn't constant. Real cohorts show heavy early churn that flattens out — month-12 retention is much higher than month-1 retention would predict using a flat churn rate. Use this calculator for back-of-envelope; use cohort-by-cohort retention curves (and net dollar retention) for diligence.
Revenue is not what pays back CAC — gross profit is. A customer paying $1,000/mo at 40% gross margin contributes $400/mo of gross profit, not $1,000. The cost of revenue (hosting, support, payment processing, licensing) comes out first. LTV with raw revenue overstates by 1/(gross margin), which is significant for low-margin SaaS.
Yes — every input is encoded in the URL. The 'Copy share link' button copies the current URL to your clipboard. Send it to your board, head of growth, or investor and they open the calculator with the same numbers.
Pair LTV with the rest of the suite. Healthy companies score well on all four; discrepancies are diagnostic.
Companion view
Same CAC denominator as the LTV:CAC ratio, but expressed in months-to-payback instead of multiple.
Whole-company view
Total burn / net new ARR. Per-customer healthy ≠ whole-company healthy.
Per-cohort view
Annualized net new ARR / quarterly S&M. The GTM-motion efficiency view.
Time view
Efficiency tells you whether to invest. Runway tells you how long you have to decide.
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LTV
$37.5k
Enter your CAC above to see the LTV:CAC ratio with industry-standard bands.
LTV
$37.5k
(ARPC/12) × GM% × lifetime months.
Customer lifetime
4y 2mo
1 / monthly churn rate.
LTV:CAC ratio
—
Enter CAC to compute.
LTV:CAC bands: >5× exceptional · 3-5× healthy · 2-3× OK · 1-2× suspect · <1× bad. The conventional target is 3-5×. Above 5×, you are likely under-investing in growth and should raise spend; below 1×, each customer loses money and unit economics need fixing before scaling.
Why gross margin matters: LTV uses gross contribution, not raw revenue. A customer paying $12k/yr at 75% GM contributes $9k/yr of gross profit; at 40% GM only $4.8k/yr. The cost of revenue (hosting, support, payment processing, licensing) has to come out before LTV is meaningful.
Churn is the lever: dropping monthly churn from 3% to 1.5% doubles the LTV (lifetime goes from 33 months to 67 months). Churn improvements have more leverage than ARPC or margin improvements at most companies.
The URL contains your inputs — drop into a board deck or investor update without retyping.
Educational tool. Simple LTV formula assumes constant churn and ARPC — real lifetime values use cohort-by-cohort decay curves and net dollar retention. Use this for back-of-envelope; use cohort retention analysis for diligence. Not financial planning advice.