What is a good LTV/CAC ratio?
Many SaaS teams use 3x as a rough benchmark, but the right target depends on cash flow, payback period, growth stage, and retention quality.
LTV/CAC calculator
Estimate whether acquisition economics make sense.
Use ARPA, gross margin, churn, and CAC to estimate LTV, customer lifetime, ratio, and payback.
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Why use gross margin?
LTV should be based on gross profit, not top-line revenue, because delivery costs reduce the value of each customer.