Unit Economics
LTV:CAC Ratio Calculator
The ultimate gauge of your business model's sustainability. Are you generating enough value from customers to justify what it costs to acquire them?
What this calculator does
The LTV:CAC Ratio Calculator measure the ROI of your customer acquisition, then compares your result against operator benchmarks (< 1: Unhealthy. 3: Ideal. > 5: Under-investing in growth.). Enter your numbers below and you'll get a result, a benchmark band, and a plain-English interpretation in under two minutes.
Inputs
Use the LTV calculator if you don't have this
Use the CAC calculator if you don't have this
Results
LTV:CAC ratio
3.0:1
Healthy, sustainable growth
LTV
$15K
CAC
$5K
Ratio vs SaaS benchmarks
Okay
What this means
3.0:1 is the SaaS gold standard. You have a sustainable unit economics engine. Consider scaling acquisition spend.
Formula
Ratio = LTV / CACBenchmarks: < 1: Unhealthy. 3: Ideal. > 5: Under-investing in growth.
Sources: OpenView 2024 SaaS Benchmarks, ChartMogul Retention Reports, ProfitWell Pricing Studies, and Pressense operator data.
Frequently asked questions
Why is a ratio greater than 5 considered 'under-investing'?
If your ratio is extremely high, you're likely leaving growth on the table, competitors will out-spend you and capture market share. Press the gas: increase ad spend, hire more reps, or expand into adjacent channels.
How to fix a poor LTV:CAC ratio?
Either lower CAC (more efficient channels, better conversion, sharper ICP) or raise LTV (reduce churn, raise ARPU, drive expansion). LTV improvements compound, so retention investments often pay back faster than CAC reduction efforts.
Why is 3:1 the SaaS gold standard?
It balances growth and efficiency. At 3:1, you're earning enough multiple on each acquisition dollar to fund the next one and still generate margin. Below 3:1 risks running out of cash; above 5:1 means you're over-saving and under-shipping growth.
About this calculator
Built and reviewed by the Pressense team, a strategy and systems partner working with B2B SaaS operators on unit economics, retention, GTM, and positioning. Every calculator in this library uses public benchmarks from OpenView, ChartMogul, ProfitWell, and KeyBanc, supplemented with anonymised data from the operators we partner with.
Disclaimer: This calculator is for educational and planning purposes only. Outputs are estimates based on the inputs you provide and industry benchmarks, not financial, tax, legal, or investment advice. Validate all results with a qualified professional before making decisions about funding, valuation, hiring, or capital allocation.
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