Understanding SaaS LTV to CAC Ratio
How we calculate. LTV:CAC = customer lifetime value ÷ customer acquisition cost. The form uses the same arithmetic as the worked examples on this page. See our methodology and accuracy policy.
Real-world scenario: A typical SaaS LTV to CAC Ratio case uses customer ltv 3600 and cac 1200. Enter the same figures below to reproduce the worked path.
What is SaaS LTV to CAC Ratio?
A unit-economics KPI. Distinct from finance loan-to-value (mortgage LTV) on the Finance hub.
- Customer LTV = lifetime value of a customer
- CAC = fully loaded acquisition cost
- Same cohort basis
The Formula
Worked Example
Common Use Cases
- Growth efficiency: LTV vs CAC
- Channel reviews: payback quality
- Fundraising packs: unit economics
Pro Tips
- Don’t use Finance loan-to-value
- Freeze LTV method (gross margin, churn)
- Pair with CAC payback months
Limitations: SaaS LTV to CAC Ratio results are educational SaaS / subscription planning aids—not accounting, tax, or investment advice. Confirm definitions with your billing system and board reporting standards.
FAQ
Same as Finance loan-to-value (LTV)?
No. Finance LTV is loan ÷ property value. This page is SaaS customer lifetime value ÷ CAC.
What if CAC is 0?
LTV:CAC is undefined—enter positive CAC.
Authoritative References
For SaaS metrics and subscription performance concepts, consult:
- SaaStr — SaaS growth and metrics context
- For Entrepreneurs — SaaS metrics explainers
- Bessemer Venture Partners — cloud / SaaS industry research