Free Strategy Tool

SaaS LTV Calculator

Q: What is a good LTV:CAC ratio?

The Golden Standard is 3:1 (LTV is 3x CAC). If it's 1:1, you are losing money. If it's 5:1, you are growing too slowly and should spend more on marketing.

Q: How do I increase SaaS LTV without changing the product?

Annual Upgrades. Offer 2 months free for an annual prepay. This locks the customer in for 12 months, instantly boosting Cash Flow and artificially lowering churn to 0% for that year.

Q: Gross LTV vs Net LTV?

Always calculate LTV based on Gross Profit (Revenue - Server Costs - Support), not just Revenue. A high-maintenance customer might have high Revenue LTV but negative Profit LTV.

Lifetime Value vs CAC Model

LTV ($)

CAC ($)

LTV : CAC Ratio5.0:1

Output Benchmarks

Death Spiral< 1:1

Burning cash fast

Sustainable3:1

The Golden Ratio

Unicorn5:1+

Invest heavily in growth

How to use this SaaS LTV Calculator

Input Data

Enter your current SaaS metrics into the labeled fields above.

Analyze Ratios

Instantly view efficiency ratios calculated against elite standards.

Optimize

Compare your results with the Benchmarks on the right to find leverage points.

The Core Equation

(ARPU × Gross Margin %) / Churn Rate

Strategic Context

THE STRATEGIC VIEW

Customer Lifetime Value (LTV) is the North Star of SaaS valuation. Unlike transactional businesses, a SaaS brand is a collection of future cash flows. Strategic success depends on the "LTV:CAC Ratio"—if your ratio exceeds 3.0x, you have a license to print money by spending aggressively on growth.

Operational Reality

THE RECURRING REVENUE ENGINE

SaaS valuation is driven almost entirely by LTV. Because revenue is recurring, a small increase in Retention (lowering Churn) has a compound effect on LTV that is far more powerful than acquiring new customers.

THE CHURN CLIFF

Most SaaS companies die because they track "Average Churn". You need to track "Cohort Churn". If 40% of users drop off in Month 1, your problem is Onboarding, not Product. LTV is theoretical; Churn is cash reality.

Tactical FAQ

TACTICAL Q&A

Q: What is a good LTV:CAC ratio?

A: The Golden Standard is 3:1 (LTV is 3x CAC). If it's 1:1, you are losing money. If it's 5:1, you are growing too slowly and should spend more on marketing.

Q: How do I increase SaaS LTV without changing the product?

A: Annual Upgrades. Offer 2 months free for an annual prepay. This locks the customer in for 12 months, instantly boosting Cash Flow and artificially lowering churn to 0% for that year.

Q: Gross LTV vs Net LTV?

A: Always calculate LTV based on Gross Profit (Revenue - Server Costs - Support), not just Revenue. A high-maintenance customer might have high Revenue LTV but negative Profit LTV.

Output Benchmarks

Death Spiral< 1:1

Burning cash fast

Sustainable3:1

The Golden Ratio

Unicorn5:1+

Invest heavily in growth

Recommended Course

Master The System

This calculator is just one tactical step. The full strategy is documented in the core protocol.

Source Lesson

Finance & Capital: SaaS Protocol

Start Lesson →

Related concepts

#CAC#LTV#Churn#ARPU