How is LTV calculated?

LTV (lifetime value) is ARPU × gross margin × customer lifetime. Lifetime is derived from churn as 1 ÷ churn rate, or you can enter the lifetime directly if you know it. For example, $50 monthly ARPU at 80% margin with 5% monthly churn gives a 20-month lifetime and an LTV of $800.

What is a healthy LTV:CAC ratio?

A common benchmark is 3:1 or higher. Below 1:1 you aren't recovering acquisition cost and are losing money. A very high ratio (e.g. 5:1+) can mean you're under-investing and leaving growth on the table.

What is the payback period?

It's how long it takes to recover the acquisition cost: CAC ÷ (ARPU × margin). For example, a $300 CAC against $40 of monthly margin contribution pays back in 7.5 months. Shorter is better for cash flow.

Should I enter churn or lifetime?

Either works. Use churn if you know your per-period churn rate, or enter lifetime directly if you know the average duration a customer stays. The tool computes the customer lifetime based on the mode you pick.

Is my data sent to a server?

No. Every calculation runs entirely in your browser. Your numbers are never uploaded or stored on a server.

Yes, it is completely free. No sign-up and no installation required.

LTV / CAC calculator

Calculators

Enter ARPU, margin, churn (or lifetime), and acquisition cost to compute LTV, CAC, the LTV:CAC ratio, and payback period. Everything runs in your browser; your data is never uploaded.

What is this LTV / CAC calculator?

A free, browser-based calculator for the core unit economics of any subscription or repeat-purchase business. Enter ARPU, gross margin, churn (or a direct lifetime), and acquisition cost, and it computes lifetime value (LTV), the LTV:CAC ratio, and the payback period — the three numbers investors and founders watch most. Everything runs locally in your browser, so your data is never uploaded.

The formulas

Customer lifetime = 1 ÷ churn rate (or entered directly).
LTV = ARPU × gross margin × lifetime.
LTV:CAC ratio = LTV ÷ CAC (aim for 3:1 or higher).
Payback period = CAC ÷ (ARPU × margin).

How to use it

Enter ARPU and gross margin for one period (e.g. monthly).
Choose churn-based or direct lifetime, then enter that value.
Enter your CAC and read LTV, the ratio, and payback on the right.

Common use cases

Checking whether your acquisition spend is sustainable.
Preparing unit-economics slides for investors or leadership.
Setting a target CAC from a desired LTV:CAC ratio.

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FAQ

Operated by

Tools by Timothe AI is a suite of free tools built and operated by unbounded pioneering inc, the company behind Timothe AI.

Ryosuke SuzukiFounder & CEO

Founder & CEO of Unbounded Pioneering Inc., the company behind Timothe AI, and an expert in machine learning and AI product development. He began his career in machine learning research at a university laboratory, then designed and built large-scale products as a software engineer at PLAID, Rakuten, and Recruit, while also driving new business development. Now specializing in generative AI and AI products, he works across both engineering and business development, and is a named inventor on multiple granted patents in web technology.

Named inventor on granted patents JP6887648 & JP7480958 · Patent pending on Timothe AI technology

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