#955 · Startup Tool

Series A LTV Calculator

Calculate customer lifetime value for a Series A SaaS company using ARPA, gross margin, churn, expansion revenue, and CAC. Use the output to test whether acquisition spend is sustainable.

Calculator

Lifetime value inputs
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How to use this calculator

  • Enter monthly average revenue per account.
  • Add gross margin percentage.
  • Enter monthly churn rate.
  • Enter CAC to compare LTV against acquisition cost.

What the result means

Higher LTV and a stronger LTV:CAC ratio indicate more durable unit economics. Series A SaaS companies often need clear evidence that LTV substantially exceeds CAC.

Customer Lifetime = 1 ÷ Monthly Churn. Monthly Gross Profit = ARPA × Gross Margin. LTV = Monthly Gross Profit × Customer Lifetime. LTV:CAC = LTV ÷ CAC.

Early LTV estimates are sensitive to churn assumptions. Use cohort-based retention where available.

Example calculation

With $1,200 ARPA, 78% gross margin, 3% monthly churn, and $6,000 CAC, estimated LTV is about $31,200 and LTV:CAC is 5.2.

Tips for better results

  • Reduce churn before scaling paid acquisition.
  • Increase ARPA through packaging and upsells.
  • Improve gross margin by reducing support and infrastructure cost.
  • Compare LTV by SMB, mid-market, and enterprise segments.

FAQ

What is a good LTV to CAC ratio for a Series A SaaS startup?

A common target is at least 3:1, while stronger companies may show 4:1 or higher depending on payback and growth rate.

How should a startup calculate LTV when churn is changing?

Use cohort-based churn where possible and test conservative, expected, and aggressive churn assumptions.

Should expansion revenue be included in SaaS LTV?

Expansion can be included when it is predictable and supported by historical upsell or seat expansion data.

Why does gross margin affect customer lifetime value?

LTV should be based on gross profit, not revenue, because delivery and support costs reduce the value of each customer.

How do investors use LTV before Series B?

Investors compare LTV with CAC, retention, payback period, gross margin, and whether the company can scale acquisition profitably.

Decision metrics

MetricMeaning
LTVEstimated gross profit over customer lifetime.
LifetimeExpected customer duration from churn.
LTV:CACUnit economics efficiency ratio.
Health ScoreComposite profitability indicator.

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