Business Metrics
Quick presets for different business segments
Average Revenue Per Account per month
Total cost to acquire one customer
Revenue minus COGS (typically 70-85%)
Percentage of customers who cancel monthly
Percentage of MRR lost to churn/contraction
MRR growth from existing customers (upsells)
Advanced Settings
Per-customer onboarding/setup costs
Per-customer monthly support costs
Annual discount rate for LTV calculation
Your target CAC payback period
Customer LTV
$3,429
Lifetime value per customer
LTV:CAC Ratio
6.2x
Healthy ratio
CAC Payback
7.9 mo
On target
Net Dollar Retention
98.5%
Net negative
Recommendations
- Net Dollar Retention below 100% - prioritize expansion revenue and reduce churn
- Quick ratio below 4 - growth efficiency could be improved
CAC Payback & Cash Recovery
Cohort MRR Trajectory (100 customers)
Industry Benchmarks
Compare your metrics against typical SaaS benchmarks for your segment (SMB).
| Metric | Your Value | Good | Great | Rating |
|---|---|---|---|---|
| LTV:CAC Ratio | 6.2x | 3x | 5x | great |
| CAC Payback (months) | 7.9 | 12 | 6 | good |
| Net Dollar Retention (%) | 98.5% | 90% | 100% | good |
| Monthly Churn (%) | 3% | 5% | 3% | great |
Unit Economics Summary
Quick Answer: What are SaaS LTV and CAC?
LTV (Lifetime Value) measures total revenue from a customer over their relationship. CAC (Customer Acquisition Cost) is what you spend to acquire each customer. The LTV:CAC ratio should be 3:1 or higher for a healthy SaaS business. LTV is calculated as (ARPA x Gross Margin) / Monthly Churn Rate. CAC payback period should be under 12 months for SMB and 12-18 months for mid-market.
Key Facts
- LTV formula: (ARPA x Gross Margin) / Monthly Churn Rate
- Healthy LTV:CAC ratio is 3:1 or higher (earn $3 for every $1 spent)
- LTV:CAC below 3:1 suggests overspending on acquisition
- LTV:CAC above 5:1 may indicate under-investment in growth
- CAC payback under 12 months for SMB, 12-18 months mid-market
- Net Dollar Retention (NDR) above 100% means growth without new sales
- Top SaaS companies achieve 120%+ NDR through upsells and expansions
Adjust Monthly Churn Rate
See how reducing churn dramatically improves LTV and unit economics
Personalized Insights
2 insights based on your inputs
Good News
Excellent LTV:CAC ratio of 6.2x exceeds the 3x benchmark for healthy SaaS businesses
Good News
CAC payback of 7.9 months is within your 12 month target
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Frequently Asked Questions
What is a good LTV:CAC ratio?
A healthy LTV:CAC ratio is typically 3:1 or higher. This means you earn $3 in customer lifetime value for every $1 spent acquiring them. Ratios below 3:1 suggest you may be overspending on acquisition, while ratios above 5:1 might indicate under-investment in growth.
How is LTV calculated?
LTV = (ARPA × Gross Margin) / Monthly Churn Rate. For more accurate calculations, you can also apply a discount rate to account for the time value of money.
What is a good CAC payback period?
For SMB SaaS, aim for under 12 months. Mid-market can target 12-18 months, and enterprise 18-24 months. Shorter payback means faster capital efficiency and lower risk.
What is Net Dollar Retention (NDR)?
NDR measures revenue retained from existing customers including expansion minus churn. NDR above 100% means you grow revenue from existing customers even without new sales. Top SaaS companies achieve 120%+ NDR.
How does gross margin affect LTV?
Gross margin directly multiplies your LTV. A company with 80% gross margin will have 60% higher LTV than one with 50% gross margin, all else being equal. Software companies typically target 70-85% gross margins.
How this works
Calculations are run entirely in your browser. No inputs are sent to our servers and no account is required. Formulas follow standard US definitions from the IRS and the CFPB where applicable; international users should confirm local tax and regulatory rules apply.
What this tool can’t do
When to consult a professional
This is a software engineering tool, not financial advice. Run the math here, then take the result to a certified financial planner, CPA, or your bank before making a decision that materially affects your money.
Sources
- [1]Consumer Financial Protection Bureau (CFPB)Official sourceconsumerfinance.govAccessed Apr 21, 2026
US consumer finance regulator; authoritative on mortgage disclosures, APR rules, credit cards.
Full-stack software engineer specializing in embedded systems, web architecture, and AI/ML. Founder of Practical Web Tools. Built the gesture-controlled drone IP acquired by KD Interactive (Aura Drone, sold on Amazon).