How to Calculate LTV and CAC for SaaS

 

What is CAC?

Customer Acquisition Cost is how much you spend to acquire one customer.

Formula:
Total marketing cost ÷ number of customers acquired.

What is LTV?

Lifetime Value is the total revenue generated by one customer.

Formula:
Average revenue per user × average customer lifespan.

Why It Matters

If LTV is lower than CAC, your SaaS is unsustainable.