CAC/LTV

The CAC/LTV (or LTV:CAC) report compares the lifetime value of a customer to the cost of acquiring them. This ratio is one of the most important strategic metrics for SaaS businesses, as it reveals whether your customer economics are fundamentally healthy and sustainable.

The LTV:CAC ratio is calculated by dividing customer lifetime value by customer acquisition cost.

$$\text{LTV:CAC} = \frac{\text{LTV}}{\text{CAC}}$$

Industry Benchmark: A ratio of 3:1 or higher is generally considered healthy for a SaaS business, meaning the customer generates at least three times the revenue it cost to acquire them.

For detailed explanations of these metrics, see the LTV guide and CAC guide in the SaaS Metrics Academy.

Overview

The CAC/LTV report is one of three tabs in the CAC report suite. For the other tabs, see CAC and CAC Payback.

How LTV is Calculated

LTV in this report uses the same calculation as the LTV report: ARPA (Average Revenue Per Account) divided by the average Logo Churn Rate over the past six months.

$$\text{LTV} = \frac{\text{ARPA}}{\text{Average 6-Month Logo Churn Rate}}$$

This provides a consistent lifetime value estimate based on current revenue and retention metrics.

Timeline chart

The timeline chart displays the LTV:CAC ratio over the selected period. A rising ratio indicates improving customer economics, either through increased lifetime value (higher ARPA or lower churn) or more efficient acquisition (lower CAC). The currently ongoing period is marked as a dashed line.

Breakdown table

The table underneath the chart displays the components used to calculate the LTV:CAC ratio.

All monetary values are shown in your selected base currency.

Filters

The report supports a wide range of filters to help you analyze the LTV:CAC ratio within specific segments of your business. These include:

• Date range

  Select a custom range or preset periods (last 30 days, last quarter, etc.)

• Interval

  Choose how the ratio is aggregated: daily, weekly, monthly, quarterly, or yearly.

• Currency Select your reporting currency. All amounts are converted to your selected base currency using daily historical exchange rates. If you want to fix/freeze FX rates in your reports, you can tick a checkbox, and all FX rates are fixed at the start date of the report.

• Additional filters – plan, region/country, acquisition channel, etc. (see all filters)

Filters are applied to both the chart and the table simultaneously.

Exporting the data

You can export the table as a CSV file for offline analysis or reporting by clicking the "Export" icon next to the date picker.

Practical tips

• Monitor Trends Over Time: Track the LTV:CAC ratio over time to ensure your unit economics remain healthy as you scale. A declining ratio may signal trouble before it impacts cash flow.
• Segment by Channel: Use Additional filters to calculate LTV:CAC by acquisition channel. Channels with ratios below 3:1 may be destroying value and should be optimized or deprioritized.
• Balance Growth and Efficiency: A very high ratio (e.g., 10:1+) may indicate you're under-investing in growth. A ratio below 3:1 suggests you're overspending on acquisition relative to customer value.
• Improve Both Sides: You can improve the ratio by either increasing LTV (through higher pricing or better retention) or decreasing CAC (through more efficient marketing). Use the LTV and CAC reports to identify which lever to pull.