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Unit Economics Calculator

Enter ARPA, gross margin, churn, and CAC. Get LTV, LTV:CAC, and payback in one place.

Inputs
$
%
%
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Formula · LTV = ARPA × GM% / churn%

Result

Fill the inputs to see your result.

What are unit economics?

Unit economics describe the profit and cost of a single customer. The standard SaaS view is LTV, CAC, the LTV:CAC ratio, and CAC payback in months.

The formulas.

LTV = monthly ARPA × gross margin % / monthly customer churn %. LTV:CAC = LTV / CAC. Payback (months) = CAC / (monthly ARPA × gross margin %).

A worked example.

ARPA 200, gross margin 80%, monthly churn 2%, CAC 1,200. LTV = 200 × 0.8 / 0.02 = 8,000. LTV:CAC = 8,000 / 1,200 = 6.67x. Payback = 1,200 / (200 × 0.8) = 7.5 months.

What healthy looks like.

LTV:CAC at 3x or higher, payback under 12 months for SMB or 18 to 24 for enterprise, and gross margin at 70% or higher to keep the LTV honest.

Where unit economics break.

Optimistic churn estimates inflate LTV. Excluding fully loaded CAC inflates the ratio. Low gross margin quietly eats both.

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FAQ

What is unit economics?
The profit and cost of one customer. The standard SaaS view is LTV, CAC, the LTV:CAC ratio, and CAC payback in months.
How is LTV calculated here?
Monthly ARPA × gross margin %, divided by monthly customer churn %. It is the simple gross-profit LTV used in most SaaS boards.
What is a healthy LTV:CAC?
3x or higher is the venture benchmark. 1x to 3x means you are buying customers near cost; below 1x is structurally unprofitable.
What is a good payback?
Under 12 months is healthy for SMB. Enterprise tolerates 18 to 24. Beyond 24 you are running on capital, not on the customer.
What is the difference between this and the LTV calculator?
This bundles LTV, ratio, and payback into one view. The individual calculators let you drill into each input.

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