LTV to CAC Ratio Calculator
Calculate your LTV:CAC ratio to measure growth efficiency. 3:1 is the minimum healthy benchmark. Free browser-based tool.
How LTV to CAC Ratio Calculator Works
LTV:CAC Ratio = Customer Lifetime Value ÷ Customer Acquisition Cost. A ratio of 3:1 means each customer generates 3x what they cost to acquire — the widely-accepted minimum for sustainable SaaS growth. David Skok's framework: at 3:1, you're balancing efficient growth with sustainable unit economics. Above 5:1 may signal under-investment in growth; below 1:1 means you're losing money on every customer.
LTV:CAC Ratio Benchmarks
| Label | Meaning |
|---|---|
| Above 5:1 | May be under-investing — consider scaling acquisition spend |
| 3:1–5:1 | Healthy — David Skok's benchmark for sustainable SaaS |
| 1:1–3:1 | Marginal — improve retention, pricing, or reduce CAC |
| Below 1:1 | Destroying value — spending more to acquire than customers are worth |
Frequently Asked Questions
What is LTV:CAC ratio?
LTV:CAC compares the total revenue a customer generates over their lifetime against what it cost to acquire them. A 3:1 ratio means each customer generates 3x what they cost to acquire — the widely-accepted minimum for sustainable SaaS growth.
What is a good LTV:CAC ratio?
3:1 is the floor benchmark popularised by David Skok. Below 1:1 means you're losing money on every customer. Above 5:1 may mean you're under-investing in growth and leaving market share for competitors.
How do I improve my LTV:CAC ratio?
Two levers: increase LTV (improve retention, add expansion revenue, raise prices) or decrease CAC (improve conversion rates, shift to lower-cost channels, tighten ICP targeting). Improving NRR is often the highest-leverage LTV improvement available.
Is my data stored?
No.
Can I use this on mobile?
Yes.
About This Tool
Built by the Calcyo team and last updated June 2026. All calculations follow industry-standard methodology. No data leaves your browser — calculations run entirely client-side using JavaScript. If you spot an error in the formula or benchmark data, email us at support@calcyo.xyz.