LTV to CAC calculator
Calculate customer lifetime value on gross profit rather than revenue, compare it against acquisition cost, and find your payback period and maximum affordable CAC.
On $468.00 of lifetime revenue
| Step | Working | Result |
|---|---|---|
| Lifetime orders | 2.4 × 3 | 7.2 |
| Lifetime revenue | 65 × 7.2 | $468.00 |
| Lifetime gross profit (LTV)Compare CAC against this, never against lifetime revenue. | 468 × 42% | $196.56 |
| LTV : CAC | 8.19 × |
Questions people ask about this
Should LTV use revenue or profit?
Gross profit. Comparing revenue LTV against CAC is the classic way to talk yourself into unprofitable growth — a customer worth $300 in revenue at 20% margin is worth $60 to you, and paying $80 to acquire them loses money on every sale.
What is a healthy LTV to CAC ratio?
3:1 is the widely used floor. Below that, growth consumes cash faster than it produces it. Well above 5:1 usually means you are underinvesting in acquisition and could profitably grow faster.
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Where these numbers come from
This calculator uses arithmetic rather than published rates — every figure comes from the values you enter. See the methodology page for the formulas behind it.
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