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Unit Economics (CAC:LTV)

Enter CAC, ARPU, gross margin, and monthly churn to see LTV, LTV:CAC, and CAC payback in months.

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Unit Economics (CAC : LTV)

Understand CAC payback, LTV, and contribution per customer using ARPU, churn, and gross margin.

Contribution per customer (monthly)
$45.50
Lifetime value (LTV)
$1,137.50
LTV : CAC ratio
3.55 : 1
CAC payback
7 months

Subscription unit economics

Contribution = ARPU × Gross margin
LTV = Contribution ÷ Churn
Payback = CAC ÷ Contribution

Churn is monthly (entered as a percent). LTV and payback calculations rely on the steady-state assumption typical for SaaS models.

How to use

  1. Enter CAC and average monthly revenue per user (ARPU).
  2. Add gross margin percent and monthly churn percent.
  3. Review contribution, LTV, LTV:CAC, and CAC payback.

Example

Input: CAC = $320, ARPU = $65, Gross margin = 70%, Churn = 4%/mo

Output: LTV ≈ $1,138, LTV:CAC ≈ 3.56, Payback ≈ 4.9 months

Student-friendly breakdown

This walkthrough emphasizes the most searched ideas for Unit Economics (CAC:LTV): Unit Economics (CAC:LTV). Start with the formula above, then follow the guided steps to double-check your work. For quick revision, highlight the givens, plug into the equation, and finish by verifying your units.

Need more support? Use the links below to open the long-form guide, browse additional examples, or hop into adjacent calculators within the same topic — each one is a quick way to double-check your work or handle a related question without starting from scratch.

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Deep dive & study plan

Unit Economics (CAC:LTV): LTV, CAC payback, and contribution per customer from ARPU, churn, and gross margin. It's built around ltv, cac, payback, so you can go from a raw question to a checked answer without switching tools.

The math behind it: Churn is monthly (entered as a percent). LTV and payback calculations rely on the steady-state assumption typical for SaaS models. The core relationship is Contribution = ARPU × Gross margin LTV = Contribution ÷ Churn Payback = CAC ÷ Contribution, shown above the calculator so you can see exactly how your inputs turn into the result.

To use it well: (1) Enter CAC and average monthly revenue per user (ARPU). (2) Add gross margin percent and monthly churn percent. (3) Review contribution, LTV, LTV:CAC, and CAC payback. Keep your units consistent as you go, and re-run a case you already know the answer to — it's the fastest way to catch a typo before it throws off a result you're relying on.

Worked example: entering CAC = $320, ARPU = $65, Gross margin = 70%, Churn = 4%/mo returns LTV ≈ $1,138, LTV:CAC ≈ 3.56, Payback ≈ 4.9 months. Try swapping in your own numbers next, especially a case you're unsure about, before you use this for something that matters.

Quick retention checklist

  • Speak the formula aloud (or annotate it) so the relationships stick.
  • Write each step in your own words and compare with the numbered list above.
  • Swap in new numbers for the Example to make sure the calculator (and your logic) handles edge cases.
  • Check at least one related calculator below — it's the fastest way to confirm your numbers still line up from a different angle.

FAQ & notes

Can I use annual churn?

Convert annual churn to monthly before entering. For example, 20% annual churn ≈ 1.84% monthly.

What if gross margin is 0?

Contribution becomes zero, so LTV and payback cannot be computed. Increase margin or recheck your inputs.

What formula does the Unit Economics (CAC:LTV) use?

Churn is monthly (entered as a percent). LTV and payback calculations rely on the steady-state assumption typical for SaaS models.

How do I use the Unit Economics (CAC:LTV)?

Enter CAC and average monthly revenue per user (ARPU). Add gross margin percent and monthly churn percent. Review contribution, LTV, LTV:CAC, and CAC payback.