SaaS Metrics Calculator

Calculate the core subscription metrics in one place: ARR, ARPU, customer lifetime, LTV, LTV:CAC ratio and CAC payback period. Change any input and every result updates.

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Sales and marketing spend ÷ new customers in the same period

LTV : CAC ratio

3.33 : 1

Around the common 3:1 rule of thumb or above

Customer lifetime value (LTV)

$1,333

CAC payback

10.0 months

Annual recurring revenue (ARR)

$120,000

ARPU (per month)

$50.00

Average customer lifetime

33.3 months

MRR lost to churn each month

$300

≈ 6.0 customers

Formulas used

  • ARR = MRR × 12
  • ARPU (average revenue per user, monthly) = MRR ÷ paying customers
  • Average customer lifetime (months) = 1 ÷ monthly churn rate
  • LTV = ARPU × gross margin ÷ monthly churn rate
  • LTV:CAC = LTV ÷ CAC
  • CAC payback (months) = CAC ÷ (ARPU × gross margin)

This is the simple steady-state model. It assumes churn and ARPU stay constant and ignores expansion revenue and discounting. It is good for quick decisions and comparisons. For investor reporting, build a cohort-based model from your billing data.

Worked example

A SaaS product has $10,000 MRR from 200 customers, 3 % monthly churn, 80 % gross margin, and spends $400 to acquire each new customer.

  • ARR: $10,000 × 12 = $120,000
  • ARPU: $10,000 ÷ 200 = $50 per month
  • Customer lifetime: 1 ÷ 0.03 ≈ 33.3 months
  • LTV: $50 × 0.8 ÷ 0.03 ≈ $1,333
  • LTV:CAC: $1,333 ÷ $400 ≈ 3.33 : 1
  • CAC payback: $400 ÷ ($50 × 0.8) = 10 months

Cutting churn from 3 % to 2 % would raise LTV to $2,000 and the ratio to 5 : 1 without changing price or marketing spend. That is why churn is often the first metric worth working on. More on this in what is a good LTV to CAC ratio.

Frequently asked questions

What is a good LTV to CAC ratio? +

A ratio of about 3:1 is a widely used rule of thumb for SaaS: each customer brings in roughly three times what it cost to acquire them. Below 1:1 you lose money on every customer. Far above 3:1 can mean you are under-investing in growth. Treat it as a guideline, not a law.

Should I use revenue churn or customer churn? +

This calculator uses customer (logo) churn: the share of customers who cancel each month. If your customers upgrade a lot, net revenue churn can be much lower, and LTV based on customer churn will be conservative.

Why does LTV use gross margin? +

Revenue is not profit. Hosting, support and payment fees come out of every subscription. Multiplying by gross margin gives the gross profit a customer brings in, which is what you should compare with the cost of acquiring them. Set gross margin to 100 % if you want revenue-based LTV.

My churn is 0 %. Why is LTV empty? +

With zero churn the simple formula divides by zero and LTV becomes infinite. In practice no business keeps every customer forever. Use your best estimate, or a small number such as 1 %, until you have enough data.

What is CAC payback period? +

It is how many months of gross profit from a new customer it takes to earn back the cost of acquiring them. Shorter payback means you recover cash faster and can reinvest it in growth sooner.

For information only. This calculator gives estimates based on the numbers you enter. It is not financial, tax or investment advice. Check important decisions with a qualified professional.

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