Unit Economics Calculator — CAC, LTV & Payback

What it does. Computes CAC, gross-margin LTV, the LTV:CAC ratio, and CAC payback period from a handful of inputs, with plain-English definitions next to every field. Built for SaaS and DTC founders who need defensible unit-economics numbers for a board update or fundraise.

When to use it

Use it before every planning cycle, before raising a round, before scaling any paid channel, and whenever pricing or churn changes meaningfully. The numbers it produces are the inputs to almost every other growth decision.

What you'll need

  • Total sales & marketing spend (period)
  • Net new customers acquired in the same period
  • Average revenue per customer (monthly or annual)
  • Gross margin %
  • Monthly logo churn % (SaaS) or repeat rate (DTC)

How the math works

CAC = fully-loaded S&M spend ÷ new customers. Gross-margin LTV = (ARPU × gross margin) ÷ monthly churn. LTV:CAC = LTV ÷ CAC. CAC payback = CAC ÷ (ARPU × gross margin). The calculator flags the standard thresholds: LTV:CAC ≥ 3:1 healthy, payback < 12 months for SMB SaaS and < 18 months for mid-market.

How to read the output

If LTV:CAC is below 3:1, the issue is almost always one of three things: CAC is too high (channel mix problem), ARPU is too low (pricing problem), or churn is too high (retention problem). The output flags which lever is most broken so you can prioritise.

Related tools & playbooks

Pair this with the Marketing Budget Calculator, the SaaS Pricing & Packaging Playbook, and the Onboarding & Retention Playbook.

FAQ

Should CAC include salaries?

Yes — use fully-loaded S&M cost (people + tools + media + agencies). Paid-only CAC is useful for channel decisions but misleading as a unit-economics number.

What's a healthy LTV:CAC?

3:1 is the working floor. Best-in-class SaaS sits at 4–5:1. Below 3:1 is a warning; below 1:1 is unsustainable.

How is gross-margin LTV different from revenue LTV?

Gross-margin LTV strips out cost of goods/serving — it's the actual cash a customer contributes. Revenue LTV overstates value, especially for low-margin DTC.