CAC & LTV Calculator

Scaling a recurring revenue enterprise without clear visibility into customer unit economics frequently triggers excessive cash burn and inefficient marketing acquisition campaigns. Rapid customer acquisition can disguise severe financial vulnerability if the total cost to acquire a subscriber surpasses the net gross profit that customer generates across their relationship lifecycle. To diagnose acquisition efficiency, you input total marketing expenditures, the number of new customers acquired in that period, monthly average revenue per user, gross profit margin percentage, and monthly customer churn.

The calculator produces your direct customer acquisition cost, estimated customer lifetime value, overall LTV to CAC ratio, and estimated capital payback timeline in months. Maintaining a ratio between three and five generally indicates balanced, capital-efficient growth that supports ongoing expansion. However, this formulation assumes steady churn and uniform subscriber value across time, omitting user cohort variations, account upgrades, net revenue expansion, or churn curves that change over extended customer lifespans.

Customer Acquisition Cost is determined by CAC = Total Marketing Spend / New Customers Acquired. Lifetime Value is computed via LTV = (ARPU × Gross Margin) / Churn Rate, reflecting the cumulative gross profit generated across the customer's average operational lifespan. Dividing LTV by CAC yields the unit economic ratio, while payback period calculates months required to recover acquisition outlay.