LTV Calculator: Know Your Real LTV:CAC Ratio in 60 Seconds
The LTV:CAC Ratio Calculator gives B2B SaaS CMOs and growth leaders three LTV methods in one calculation: basic, gross-margin adjusted, and NRR-adjusted with expansion revenue. Paste in your ARPU, churn, and CAC to instantly see your real unit economics and what they signal to a CFO or investor.
Enter your numbers
Your results
Why most LTV calculations in the wild are wrong
LTV is the total gross margin a customer is expected to generate from the moment they sign until they churn. Most LTV calculations are wrong in two predictable ways: they use revenue instead of gross margin, and they ignore expansion revenue. A company with 70% gross margins and a revenue LTV of $30,000 has a margin LTV of $21,000. That difference collapses a borderline 3:1 ratio into a 2.1:1 ratio that no Series B investor will accept.
To improve marketing ROI through the LTV lens, focus on reducing early churn and increasing expansion revenue. Teams using lifecycle automation typically improve net revenue retention by 5-12 percentage points within the first year, which compounds LTV significantly.
LTV:CAC benchmarks for B2B SaaS
The 3:1 ratio is the standard Series B investor benchmark. Above 5:1 often signals room to invest more aggressively in acquisition.
Top-quartile B2B SaaS companies run 120%+ NRR. The median for companies above $10M ARR is 106-112%, per KeyBanc Capital Markets surveys.
A company with 120% NRR has theoretically infinite LTV since expansion outpaces churn. At 95% NRR, LTV is capped by the 5% net monthly decline.
SaaS companies at $10M-$200M ARR typically operate at 65-80% gross margins. Infrastructure-heavy products land lower; pure software lands higher.
Four steps to your investor-ready LTV:CAC ratio
Enter ARPA and monthly churn rate
Enter your average revenue per account per month and your monthly gross churn rate as a percentage. The calculator immediately shows your basic LTV.
Add your gross margin percentage
Enter your blended gross margin to get gross-margin adjusted LTV, the figure investors use. For B2B SaaS this is typically 65-80%.
Enter NRR for the most accurate LTV
Input your net revenue retention rate. If it is above 100%, the NRR-adjusted LTV calculation will be significantly higher than the basic version, because expansion revenue extends effective customer lifetime.
Add your CAC to see the full ratio
Enter your fully loaded new customer CAC to immediately see your LTV:CAC ratio across all three LTV methods. A ratio below 3:1 on gross-margin LTV is a signal to either reduce CAC or improve retention.
LTV:CAC questions, answered.
How do you calculate LTV for B2B SaaS?
Basic LTV equals average revenue per account (ARPA) divided by your monthly churn rate. For more accuracy, use gross-margin LTV: (ARPA × gross margin %) / monthly churn. The most accurate version for B2B SaaS with expansion revenue is NRR-adjusted LTV: (ARPA × gross margin %) / (1 - net revenue retention rate).
What is a good LTV:CAC ratio for B2B SaaS?
The widely accepted benchmark is 3:1 as the Series B investor floor. Ratios above 5:1 indicate strong unit economics but may also mean you are underinvesting in growth and leaving acquisition opportunity on the table. Early-stage companies should target 3:1. Mature SaaS with proven retention often run 4:1 to 7:1.
What is the LTV:CAC formula?
LTV:CAC ratio equals gross-margin LTV divided by fully loaded new customer CAC. Gross-margin LTV = (Monthly ARPA × Gross margin %) / Monthly churn rate. A company with $5,000 monthly ARPA, 75% gross margins, and 2% monthly churn has a gross-margin LTV of $187,500. Divided by a $25,000 CAC, that is a 7.5:1 LTV:CAC ratio.
Why does gross margin change LTV so much?
Revenue LTV and gross-margin LTV can differ by 20-35% depending on your cost structure. A company with $30,000 revenue LTV and 70% gross margins has a $21,000 margin LTV. That gap collapses a 3.0:1 ratio into a 2.1:1 ratio, which is below the investor benchmark. Investors always calculate LTV on gross margin, so using revenue LTV creates false confidence.
How does net revenue retention (NRR) affect LTV?
NRR above 100% means your existing customers grow over time, which extends effective LTV significantly. At 120% NRR, customers are expanding faster than they churn. The NRR-adjusted LTV formula captures this by using (1 - NRR) as the denominator rather than raw churn rate. At 120% NRR and 75% gross margins with $5,000 ARPA, effective LTV is much higher than a pure churn-based calculation suggests.
How long does it take to see LTV:CAC improve after reducing CAC?
CAC improvements show up in the ratio almost immediately because you are changing the denominator. LTV improvements from reducing churn or increasing expansion take longer because you are changing the numerator, which compounds over the customer lifetime. Most teams can move CAC faster in the short term through channel optimization and process efficiency.
How does Hellyeah help improve marketing ROI and LTV?
Hellyeah improves the LTV side of the ratio by helping teams reduce time-to-value through better onboarding content and lifecycle campaigns, which directly reduces early churn. On the CAC side, automating campaign execution and creative work lowers the spend required to generate the same pipeline, improving the ratio from both ends.
What is the difference between LTV and CLTV?
LTV (lifetime value) and CLTV (customer lifetime value) are typically used interchangeably. Some analysts use CLTV specifically for revenue LTV and LTV for gross-margin LTV, but there is no universal standard. When presenting to investors, always clarify whether your LTV figure is gross-margin or revenue-based to avoid misinterpretation.
More free calculators for growth teams
Your LTV:CAC ratio, monitored in real time
Hellyeah surfaces cohort-level LTV data by acquisition channel so you can see whether customers acquired through paid search actually retain better than those acquired through content, a factor static calculators cannot capture.