LTV:CAC & Customer Lifetime Value Calculator

Gross-profit LTV, CAC and payback by business model.

BusinessUpdated November 2, 2026· 2026 tables

Tables verified Nov 2, 2026

Your Inputs

one customer · one acquisition period

Customer value

Business model

Monthly revenue per customer

05,000

Gross marginiRevenue left after direct service, retention and expansion costs. Use the same margin basis for LTV and payback.

0%100%

Monthly customer churniLogo churn under a constant-rate cohort assumption. Zero churn has no finite undiscounted steady-state LTV.

0%20%

Acquisition in the same month

Include media, fully loaded salaries, commissions, agencies and acquisition tools. Exclude renewals and expansion from new customers.

Monthly marketing spend

01,000,000

Monthly sales spend

01,000,000

New customers per month

05,000

Advanced retention, discount and target options

Model assumptions

Monthly expansion / contractioniExpansion or contraction compounds only on accounts that remain. It is not a flat multiplier on LTV and does not change logo survival.

-20%25%

Annual discount rateiConverted to a compounded monthly rate. The primary ratio remains undiscounted; discounted LTV and ratio are shown separately.

0%50%

Fallback projection horizoniUsed only when steady-state LTV does not converge, and for the cumulative chart. A capped answer is not an infinite-lifetime claim.

24 mo120 mo

Target LTV:CAC ratioiYour planning target. Three to one is a common reference, not a universal law.

1 : 110 : 1

LTV : CAC · Steady-statelive

12.1 : 1

Meets target · simple payback 6.3 mo · cohort payback 6.6 mo

Compositioncumulative value per acquired customer

Cumulative gross profitDiscounted cumulativeCAC

Breakdown

Gross-profit LTV (Steady-state)$9,334

Customer acquisition cost$774

Simple payback6.3 mo

Cohort-adjusted payback6.6 mo

Discounted LTV$5,847

Max CAC at 3:1$3,111

Assessment

Ratio progress only; not a company-quality, credit or investment grade. Zero CAC has no meaningful ratio.

Revenue LTV before margin

$11,383

Shown to expose the margin adjustment

Discounted gross-profit LTV

$5,847

10% annual rate · Steady-state

Net LTV after CAC

$8,560

Lifetime gross profit less acquisition cost

Monthly acquisition spend$48K

Marketing$28,00058%
Sales$20,00042%

Target met on these assumptions

The steady-state ratio is 12.06 : 1 and discounted ratio is 7.55 : 1. Simple payback ignores retention; the cohort estimate is 6.6 mo. A high ratio alone is not an instruction to increase spend.

Revenue, margin and acquisition basis

Unit economics assessment

Monthly revenue per customer$149

Monthly gross profit per customer$149 × 82% = $122

Annual customer value$1,788

Revenue LTV before margin$11,383

Gross-profit LTV · Steady-state$9,334

Discounted LTV · Steady-state$5,847

Net LTV after CAC$8,560

Logo survival and surviving-account expansion compound monthly. Each steady-state LTV requires its own cohort factor to contract; otherwise the selected horizon is used and labeled.

Same-period acquisition and three distinct clocks

CAC and payback

Marketing + sales spend$28,000 + $20,000 = $48,000

New customers in that month62

Customer acquisition cost$48,000 ÷ 62 = $774

Simple CAC ÷ current monthly gross profit6.3 mo

Cohort-adjusted payback6.6 mo

Discounted-cohort payback6.7 mo

Average customer lifetime55.6 mo

Simple payback ignores churn, expansion and discounting. Cohort payback finds the fractional month when cumulative expected gross profit covers CAC, searching up to 600 months for subscriptions or the entered finite lifetime. N/A means it does not recover on that modeled path.

Same model, explicit sensitivity levers

Scenario comparison

Scenario	LTV	LTV:CAC	Simple / cohort payback
Your modeled path	$9,334Steady-state	12.06 : 1	6.3 mo / 6.6 mo
20% lower acquisition spend	$9,334Steady-state	15.07 : 1	5.1 mo / 5.2 mo
20% higher monthly revenue	$11,201Steady-state	14.47 : 1	5.3 mo / 5.4 mo
20% lower monthly churn	$12,899Steady-state	16.66 : 1	6.3 mo / 6.5 mo
5-point higher gross margin	$9,903Steady-state	12.79 : 1	6 mo / 6.2 mo

Visitor-selected ratio, not a universal grade

Target acquisition plan

Target LTV:CAC3 : 1

Maximum CAC at target$3,111

Break-even CAC at 1:1$9,334

Current monthly acquisition spend$48,000

Monthly spend supported at target$192,899

Current ratio / discounted ratio12.06 : 1 / 7.55 : 1

Target CAC uses the displayed steady-state LTV and holds the current new-customer count constant for target monthly spend. It does not assume that higher spend will preserve conversion, retention or margin.

Definitions and model provenance

Primary sources and limits

Constant churn, expansion and flat margins are assumptions, not measured futures. Young cohorts, sales-cycle lag, annual prepayment, channel mix, overhead and changing prices can materially alter actual economics. Three to one and twelve months are reference conventions, not guarantees.

Monthly cohort schedule and export basis

Month	Revenue index	Expected revenue	Gross profit	Cumulative gross profit	Discounted cumulative
0	100%	$0	$0	$0	$0
1	100%	$149	$122	$122	$122
2	98.7%	$147	$121	$243	$242
3	97.4%	$145	$119	$362	$359
4	96.1%	$143	$117	$479	$474
5	94.9%	$141	$116	$595	$586
6	93.6%	$139	$114	$710	$696
7	92.4%	$138	$113	$822	$803
8	91.2%	$136	$111	$934	$909
9	90%	$134	$110	$1,044	$1,012
10	88.8%	$132	$109	$1,152	$1,113
11	87.7%	$131	$107	$1,259	$1,212
12	86.5%	$129	$106	$1,365	$1,309
13	85.4%	$127	$104	$1,469	$1,404
14	84.3%	$126	$103	$1,572	$1,497
15	83.2%	$124	$102	$1,674	$1,587
16	82.1%	$122	$100	$1,774	$1,676
17	81%	$121	$99	$1,873	$1,764
18	79.9%	$119	$98	$1,971	$1,849
19	78.9%	$118	$96	$2,067	$1,932
20	77.9%	$116	$95	$2,162	$2,014
21	76.8%	$114	$94	$2,256	$2,094
22	75.8%	$113	$93	$2,349	$2,173
23	74.8%	$112	$91	$2,440	$2,250
24	73.9%	$110	$90	$2,531	$2,325
25	72.9%	$109	$89	$2,620	$2,398
26	71.9%	$107	$88	$2,707	$2,470
27	71%	$106	$87	$2,794	$2,541
28	70.1%	$104	$86	$2,880	$2,610
29	69.1%	$103	$84	$2,964	$2,678
30	68.2%	$102	$83	$3,048	$2,744
31	67.3%	$100	$82	$3,130	$2,809
32	66.5%	$99	$81	$3,211	$2,872
33	65.6%	$98	$80	$3,291	$2,934
34	64.7%	$96	$79	$3,370	$2,995
35	63.9%	$95	$78	$3,448	$3,055
36	63.1%	$94	$77	$3,525	$3,113
37	62.2%	$93	$76	$3,602	$3,170
38	61.4%	$92	$75	$3,677	$3,226
39	60.6%	$90	$74	$3,751	$3,281
40	59.8%	$89	$73	$3,824	$3,335
41	59%	$88	$72	$3,896	$3,387
42	58.3%	$87	$71	$3,967	$3,438
43	57.5%	$86	$70	$4,037	$3,489
44	56.7%	$85	$69	$4,107	$3,538
45	56%	$83	$68	$4,175	$3,586
46	55.3%	$82	$68	$4,243	$3,634
47	54.5%	$81	$67	$4,309	$3,680
48	53.8%	$80	$66	$4,375	$3,725
49	53.1%	$79	$65	$4,440	$3,769
50	52.4%	$78	$64	$4,504	$3,813
51	51.7%	$77	$63	$4,567	$3,855
52	51.1%	$76	$62	$4,630	$3,897
53	50.4%	$75	$62	$4,691	$3,938
54	49.7%	$74	$61	$4,752	$3,978
55	49.1%	$73	$60	$4,812	$4,017
56	48.4%	$72	$59	$4,871	$4,055
57	47.8%	$71	$58	$4,930	$4,092
58	47.2%	$70	$58	$4,987	$4,129
59	46.6%	$69	$57	$5,044	$4,165
60	46%	$68	$56	$5,100	$4,200

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What this calculator does

Compare gross-profit customer lifetime value with fully loaded acquisition cost, then check how long the cash takes to return. Choose a subscription cohort, an observed lifetime or repeat purchases; each model shows its assumptions and unavailable values honestly.

Figures this model assumes

Sources & method →

01CAC = same-period S&M ÷ new customers
02Base LTV = monthly gross profit ÷ monthly churn
03Simple payback = CAC ÷ monthly gross profit
043:1 is a reference, not a guarantee

The complete guide

LTV, CAC and payback without the hidden shortcuts

Updated November 2, 2026

01Start with same-period, fully loaded CAC

Customer acquisition cost is marketing spend plus sales spend divided by new customers acquired in that same period. Include media, content, agencies, acquisition software, fully loaded salaries and commissions. Do not include renewals or expansion accounts in the new-customer denominator.

A month of spend and a month of new customers is the convention here. If your sales cycle creates a lag, use a consistent trailing window in your own inputs. Allocate retention and expansion costs consistently rather than charging them to new-customer CAC while omitting them from customer economics. Zero new customers makes CAC unavailable; zero CAC makes the LTV:CAC ratio unavailable rather than zero or infinity.

CAC = same-period acquisition spend ÷ same-period new customers. A channel-level decision needs channel-level spend and customer counts, not only a blended average.

02Subscription LTV is a cohort series, not a flat expansion bonus

Monthly gross profit is ARPU multiplied by gross margin. In the subscription model, logo survival is (1 − churn) and surviving-account revenue grows by (1 + expansion). Their product is the expected revenue-retention factor for the next month.

With retention factor r below 1, undiscounted steady-state LTV is monthly gross profit ÷ (1 − r). With a compounded monthly discount rate d, discounted LTV is monthly gross profit × (1 + d) ÷ (1 + d − r), provided r is below 1 + d. Otherwise no finite steady-state answer exists, so the tool uses and labels the selected projection horizon.

Average customer lifetime uses logo churn alone: 1 ÷ monthly churn.
Expansion applies only to surviving accounts; it does not change logo survival.
Revenue LTV and gross-profit LTV are shown separately so the margin adjustment stays visible.

03Use observed lifetime or repeat purchases when they fit better

The known-lifetime model multiplies flat monthly gross profit by the observed customer duration. It does not invent churn or expansion. The discounted view spreads that monthly value across the same finite lifetime.

The repeat-purchase model uses average order value × annual orders per customer × customer lifespan in years × gross margin. This keeps episodic purchases out of a subscription-churn formula. For monthly payback only, annual orders are spread evenly across twelve months; real purchase timing can differ.

04Three payback figures answer different questions

Simple payback is CAC divided by current monthly gross profit. Cohort-adjusted payback finds the fractional month when cumulative expected gross profit first covers CAC after retention, expansion and any finite-lifetime limit. Discounted-cohort payback applies the same crossing test to discounted gross profit.

Subscription payback searches up to 600 months independently of the shorter chart horizon. Known-lifetime and repeat-purchase payback must occur inside the entered lifetime. N/A means CAC is unavailable or the modeled gross profit does not recover it. Zero CAC has immediate zero-month payback, but still no meaningful LTV:CAC ratio.

05Target CAC and sensitivity are planning arithmetic

Maximum CAC at your target is displayed LTV divided by that target ratio. Break-even CAC uses a one-to-one ratio. Target monthly acquisition spend multiplies target CAC by the current new-customer count, holding conversion and customer quality constant only for the arithmetic.

Five scenarios compare the modeled path with 20% lower acquisition spend, 20% higher revenue or order value, an improved retention assumption, and a five-point higher gross margin. These are deterministic sensitivities, not predictions that a lever will preserve every other input.

Three to one and twelve-month payback are common reference conventions, not universal pass marks. Margin, overhead, cash constraints, sales motion and customer segment can justify different targets.

06Where the model stops

Constant churn, expansion and margin are simplifications. Early cohorts often behave differently from mature ones, and a short measurement window can make a long-tailed LTV estimate unstable. Annual prepayment, sales-cycle lag, channel mix and changing prices also alter actual cash recovery.

LTV:CAC excludes overhead and does not prove company profitability. A high ratio can coexist with a long payback or insufficient market size. Recalculate by cohort and channel, retain the source data behind churn and margin, and use a fuller cash-flow model for investment decisions.

Frequently asked

LTV:CAC Calculator FAQ

11 answers

Three to one on a gross-profit LTV basis is a common software reference, not a universal rule. Below one to one, modeled lifetime gross profit does not cover CAC. Your target also depends on overhead, cash constraints, segment and confidence in the retention assumptions.

Acquisition spend is recovered from gross profit after direct cost to serve, not from top-line revenue alone. The calculator shows revenue LTV and gross-profit LTV separately so the effect of hosting, support, goods or delivery costs remains visible.

In the subscription model, monthly expansion compounds only on surviving accounts. Expected cohort revenue multiplies logo survival by surviving-account expansion. It is not a one-time percentage multiplier on LTV, and it does not improve logo retention.

If the relevant cohort factor does not contract, an undiscounted steady-state LTV has no finite answer. The tool returns a clearly labeled projection-horizon value instead of an unbounded value. A sufficient discount rate can produce a finite discounted steady state even when the undiscounted one does not exist.

No. The primary LTV:CAC uses undiscounted displayed LTV so it remains distinct from the discounted ratio shown beside it. The annual discount rate is converted to a compounded monthly rate for discounted LTV and discounted-cohort payback.

Simple payback divides CAC by current monthly gross profit and assumes that amount never changes. Cohort payback accumulates expected gross profit after churn and expansion. Discounted-cohort payback additionally reduces future value using your discount rate.

Zero new customers makes CAC unavailable. Zero CAC with at least one new customer gives immediate zero-month payback but no meaningful LTV:CAC ratio. Zero gross margin makes positive CAC payback unavailable rather than falsely reporting zero months.

Use it when observed cohort history gives a defensible average duration and you do not want to infer lifetime from a short churn sample. The model then multiplies flat monthly gross profit by that finite lifetime and does not add churn or expansion assumptions.

It multiplies average order value by annual purchase frequency, customer lifespan in years and gross margin. Monthly payback spreads annual orders evenly as a planning convention, so use actual purchase timing for a more precise cash forecast.

Yes. It can rely on an unstable long-tail retention estimate, hide a long cash-payback period or coexist with high overhead and limited market size. It is not, by itself, evidence that you should increase acquisition spend.

Recalculate when pricing, margin, retention, channel mix or acquisition spend changes, and compare consistent cohorts and periods. Preserve the underlying churn and margin evidence; a calculator cannot validate the quality of the inputs you enter.

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