LTV to CAC Calculator

Choose the right LTV

Revenue-based lifetime value can exaggerate the amount available for acquisition. Contribution-based LTV subtracts product and other variable costs and is usually more useful for comparing with CAC.

Calculate CAC consistently

Blended CAC may include total sales and marketing cost divided by new customers. Paid-media CPA may include only platform spend. Label the version you use so comparisons remain consistent.

Interpret with payback period

A ratio alone does not show when cash returns. Two businesses can have the same LTV:CAC but very different cash-flow risk if one earns value in 30 days and another over two years. Review retention cohorts and payback timing together.

FAQ

What is a good LTV:CAC ratio?

There is no universal ratio. Capital requirements, gross margin, churn and growth strategy change what is sustainable.

Can projected LTV justify lower first-order ROAS?

Only when repeat behavior is supported by mature cohort data and the business can finance the payback period.

Compare the first-order threshold with our break-even ROAS calculator and review definitions in the marketing glossary.