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The QFINHUB lifetime value (LTV) calculator estimates how much revenue a typical customer will generate over their entire relationship with your business. I built it because SaaS founders kept confusing LTV with CAC payback, then wondering why their cash flow was tight. Two numbers, and the gap between them, tell the whole story.
Customer lifetime value (LTV) is the total revenue or profit a business can expect from a single customer account over the entire duration of their relationship.
LTV:CAC of 3:1 is the minimum healthy ratio for SaaS businesses.
CAC payback under 18 months keeps cash flow positive during growth.
Cohort retention curves beat aggregate LTV. The shape of the curve matters more than the average.
OpenView's annual SaaS benchmarks report tracks median LTV:CAC by sub-sector.
LTV = Average Order Value × Purchase Frequency × Customer Lifespan
For non-subscription businesses. For SaaS, the formula simplifies to (Average Monthly Revenue per Customer) / Monthly Churn Rate. Both approaches answer the same question: how much is one customer worth over time?
I advised a DTC skincare brand last year. Their average order was $54, customers reordered 3.2 times a year, and the average lifespan was 2.4 years. LTV: $54 × 3.2 × 2.4 = $414. Their CAC (customer acquisition cost) was $72 per Shopify data benchmarks. LTV:CAC ratio: 5.75:1. Healthy. They could afford to spend more on ads. SaaS benchmarks per OpenView's 2024 report put median LTV:CAC at 3.0:1 for B2B SaaS, but the spread is wide. BLS Producer Price Index data shows SaaS gross margins have compressed about 4 points since 2021 as cloud infrastructure costs rose, so the unit economics have shifted even when top-line retention looks unchanged.
You're a B2B SaaS with $250/month average revenue per account, 2% monthly churn, and a 12% gross margin (after support and infrastructure costs). LTV = $250 / 0.02 = $12,500 in revenue, or $1,500 in gross profit. If your CAC is $400, your LTV:CAC is 3.75:1 on gross profit. That's strong. Aim for at least 3:1, with payback period under 18 months.
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These authoritative sources inform our calculator methodology and ensure accuracy.
Written by Qasem Mohammed
Financial tools developer and founder of QFINHUB. All calculators are built with industry-standard formulas and reviewed for accuracy. Content is for educational purposes only — always consult a qualified financial professional for decisions about your specific situation.
Last updated: August 10, 2026 ·About QFINHUB · Editorial Policy
Last reviewed by Qasem Mohammed — August 10, 2026
AI & Software Engineer, Founder & Lead Developer at QFINHUB · Editorial Policy
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Customer Lifetime Value
$640.00
LTV / CAC Ratio
3.20
Healthy ratio ✓
Customer Lifespan
4.0 yrs
Based on retention rate
LTV (1 yr)
$160.00
Over 1 yr
Annual Revenue per Customer
$400.00