3x Rent Calculator
Calculate if your income meets the 3x rent rule. Compare 30% rule, 25% rule, and 50/30/20 budgets with income qualification tables and housing affordability analysis.
SaaS LTV Calculator
Calculate SaaS customer lifetime value, LTV:CAC ratio, CAC payback period, and net revenue retention. Includes cohort survival analysis and churn sensitivity.
Customer LTV (Gross Margin)⧉
$12,500.00
Simple LTV: $16,666.67 × 0.75% GM
DCF-Adjusted LTV⧉
$9,776.69
Discounted at 10% over 33 month lifetime
LTV:CAC Ratio⧉
2.5x
Marginal (1-3x)
CAC Payback Period⧉
13.3 months
Caution: Over 12 months
Avg Customer Lifetime⧉
33 months
2.8 years at 0.03% effective monthly revenue decay
Net Revenue Retention⧉
0.69%
Net contraction — work on expansion
Portfolio LTV⧉
$12,500,000.00
1,000.00 customers × $12,500.00 LTV
Annual Run Rate⧉
$6,000,000.00
1,000.00 × $500.00 × 12
LTV:CAC Health Gauge
2.5x
0x (Red)2x3x (Target)6x+
Cohort Survival (1,000 customers)
| Month | Surviving | Retention | Monthly Rev | Cumulative Rev | LTV/Customer |
|---|---|---|---|---|---|
| 0 | 1,000.00 | 100.0% | $500,000.00 | $500,000.00 | $0.00 |
| 6 | 833.00 | 83.3% | $416,486.00 | $3,200,285.92 | $3,200.29 |
| 12 | 694.00 | 69.4% | $346,921.18 | $5,449,548.50 | $5,449.55 |
| 18 | 578.00 | 57.8% | $288,975.63 | $7,323,121.26 | $7,323.12 |
| 24 | 481.00 | 48.1% | $240,708.61 | $8,883,754.91 | $8,883.75 |
| 30 | 401.00 | 40.1% | $200,503.53 | $10,183,719.06 | $10,183.72 |
| 36 | 334.00 | 33.4% | $167,013.83 | $11,266,552.80 | $11,266.55 |
Churn Sensitivity Analysis
| Monthly Churn | Lifetime | LTV | LTV:CAC | CAC Payback |
|---|---|---|---|---|
| 1% | 100 months | $37,500.00 | 7.5x | 13.3 mo |
| 2% | 50 months | $18,750.00 | 3.7x | 13.3 mo |
| 3% | 33 months | $12,500.00 | 2.5x | 13.3 mo |
| 5% | 20 months | $7,500.00 | 1.5x | 13.3 mo |
| 7% | 14 months | $5,357.14 | 1.1x | 13.3 mo |
| 10% | 10 months | $3,750.00 | 0.8x | 13.3 mo |
SaaS Health Benchmarks
| Metric | Your Value | Good | Great |
|---|---|---|---|
| LTV:CAC Ratio | 2.5x | > 3x | > 5x |
| CAC Payback | 13.3 mo | < 12 months | < 6 months |
| Net Revenue Retention | 69% | > 100% | > 120% |
| Monthly Gross Churn | 0.03% | < 3% | < 1% |
| Gross Margin | 75% | > 70% | > 80% |
Planning notes, formulas, and examples
About the SaaS LTV Calculator
Customer Lifetime Value (LTV) is one of the core SaaS unit-economics metrics. It measures the gross-margin revenue you can expect from an average customer over the life of the relationship. Combined with Customer Acquisition Cost (CAC), the LTV:CAC ratio helps you judge whether customer growth is creating value or consuming too much capital.
The standard SaaS LTV formula is deceptively simple — recurring revenue divided by some form of churn rate, multiplied by gross margin — but the nuances matter enormously. Monthly vs annual churn produces wildly different numbers (5% monthly churn = 46% annual churn, not 60%). Expansion revenue from upsells and cross-sells can offset part of the revenue decay, and discounting future cash flows at your cost of capital gives a more realistic present-value LTV.
This calculator models those dynamics with a capped 120-month planning horizon: simple LTV, gross-margin LTV, DCF-adjusted LTV, cohort survival curves, and churn sensitivity analysis. Whether you're an operator optimizing unit economics, an investor evaluating a SaaS business, or a founder stress-testing your pricing model, these metrics help frame the tradeoffs clearly.
When This Page Helps
SaaS unit economics are highly sensitive to churn, margin, and expansion. This calculator turns those inputs into LTV, payback, and ratio metrics so you can see which operating changes actually move the business.
How to Use the Inputs
- Enter your Average Revenue Per User (ARPU) per month
- Enter your churn rate and specify monthly or annual
- Set your gross margin percentage (typically 70-85% for SaaS)
- Enter your Customer Acquisition Cost (CAC)
- Optionally add expansion revenue rate for upsell/cross-sell
- Review LTV, LTV:CAC ratio, and payback period
- Use the churn sensitivity table to model improvement scenarios
Formula used
Monthly Revenue Retention Factor = (1 − Monthly Churn) × (1 + Expansion Rate)
Simple LTV = ARPU / (1 − Revenue Retention Factor), capped at 120 months when factor ≥ 1
Gross Margin LTV = Simple LTV × Gross Margin %
LTV:CAC Ratio = Gross Margin LTV / Customer Acquisition Cost
CAC Payback = CAC / (Monthly ARPU × Gross Margin)
Avg Customer Lifetime = 1 / Effective Monthly Revenue Decay, capped at 120 months when factor ≥ 1
DCF LTV = Σ (Monthly Revenue × GM × Revenue Retention Factor^(month−1)) / (1 + Monthly Discount Rate)^monthExample Calculation
Result: LTV $12,500 | LTV:CAC 2.5x | Payback 13.3 months
At $500/mo ARPU with 3% monthly churn, average customer lifetime is 33 months. LTV = $500 × 33 = $16,667 × 75% GM = $12,500. With $5,000 CAC, LTV:CAC = 2.5x (below the 3x target). CAC payback = $5,000 / ($500 × 0.75) = 13.3 months (over the 12-month ideal). Reducing churn to 2% would push LTV:CAC to 3.75x.
Tips & Best Practices
- Reducing churn by 1% often has more impact than acquiring more customers
- Benchmark LTV:CAC at 3x minimum — below this, growth destroys cash
- Track cohort NRR monthly; it's the best predictor of long-term SaaS health
- Separate logo churn (customer count) from revenue churn — they tell different stories
- Enterprise SaaS should target < 1% monthly churn; SMB can be 3-5%
- If CAC payback > 18 months, focus on reducing CAC before scaling spend
Reading The Metrics
LTV is only useful when you pair it with CAC, payback period, and retention. A high LTV with long payback may still be weak if cash conversion is slow or churn is rising.
Scenario Planning
Use churn and expansion sensitivity to test best-case and downside cases. Small changes in retention often matter more than incremental acquisition spend, so it is worth modeling those shifts before changing pricing or growth targets.
Sources & Methodology
Last updated:
Methodology
This worksheet converts the selected churn input into a monthly churn rate, combines it with the entered monthly expansion rate to create an effective monthly revenue-retention factor, and then estimates customer lifetime value from recurring revenue, gross margin, and retention. It reports a simple gross-margin LTV, a discounted cash-flow LTV over a capped 120-month horizon, LTV:CAC ratio, CAC payback period, cohort-survival tables, and churn-sensitivity scenarios.
It is a scenario model rather than an accounting statement or board-approved forecast. Real SaaS cohorts can behave very differently by customer segment, contract term, revenue recognition policy, and expansion timing.
Sources
- Understanding MRR movements (ChartMogul) — Practical definitions for churn, expansion, contraction, and recurring-revenue movement.
- Chart: Customer Churn Rate (ChartMogul) — Reference for recurring-revenue churn measurement and cohort framing.
- Startup Operations and Unit Economics (Harvard Business School) — Foundational unit-economics context for CAC, gross margin, and customer-lifetime modeling.
Frequently Asked Questions
The industry standard is 3:1 or higher. Below 1:1 means you're losing money on every customer. 1-3x is marginal — you're making money but growth is risky. Above 3x is healthy. Above 5x suggests you may be under-investing in growth. David Skok (venture capitalist) popularized the 3x benchmark.
Under 12 months for most SaaS businesses. Under 6 months is excellent. Payback over 18 months puts strain on cash flow and makes growth capital-intensive. Enterprise SaaS with annual contracts can tolerate slightly longer payback (12-18 months) because of higher retention.
Monthly churn = 1 − (1 − annual churn)^(1/12). For example, 30% annual churn = 1 − 0.70^(1/12) = 2.9% monthly. Do NOT divide by 12: 30%/12 = 2.5% monthly, which understates the actual churn because it ignores compounding.
NRR measures how revenue from an existing cohort changes after churn and expansion. In this worksheet, annualized NRR is the monthly revenue-retention factor compounded across 12 months. NRR above 100% means expansion is more than offsetting churn in the modeled cohort.
Expansion revenue offsets part of the cohort revenue decay. In this worksheet, higher expansion increases the monthly revenue-retention factor and therefore raises simple and DCF-based LTV. If expansion fully offsets the modeled revenue decay, the page caps the result at a 120-month planning horizon instead of extrapolating indefinitely.
Yes, for rigorous analysis. Simple LTV assumes a dollar earned in month 36 is worth the same as today, but it's not. DCF-adjusted LTV discounts future revenue by your cost of capital (typically 10-15% for SaaS). This is more conservative and more accurate, especially for businesses with long customer lifetimes.
More in this topic
Home Appreciation Calculator
Estimate future home value and equity growth over time. Calculate ROI, leveraged returns, and compare appreciation rate scenarios with year-by-year breakdowns.
Car Lease Calculator
Calculate monthly car lease payments. Break down depreciation, finance charges, and taxes with money factor comparison, term analysis, and due-at-signing totals.