Unit Economics Calculator
Analyze LTV, CAC, and payback period
What are Unit Economics?
Unit economics measure the direct revenues and costs associated with a single customer or unit of your business. If each customer generates more value than it costs to acquire and serve, you have a scalable model. If not, growing faster just means losing money faster.
Key Terms
The total revenue or gross profit expected from a single customer over the entire duration of their relationship with your business.
The total cost of acquiring a new customer, including marketing spend, sales salaries, and any other related expenses divided by the number of new customers gained.
The ratio of customer lifetime value to acquisition cost. A ratio of 3:1 or higher is considered healthy for most SaaS businesses.
The number of months it takes for a customer to generate enough gross profit to repay their acquisition cost.
Formulas Used
Multiply average revenue per user by gross margin and average customer lifespan to get the gross-profit-weighted lifetime value.
A ratio of 3:1 or higher is considered healthy, meaning each customer generates three times what it costs to acquire them.
Healthy SaaS businesses aim for a payback period under 12 months so that acquisition costs are recovered quickly.
Three simple steps
Enter acquisition and revenue data
Input your customer acquisition cost, average revenue per account, gross margin, and churn rate.
Calculate unit economics
The calculator computes LTV, LTV/CAC ratio, and CAC payback period from your inputs.
Assess sustainability
Review whether your unit economics support profitable scaling and where to optimize.
Built for founders like you
Growth-stage startups
Validate that scaling acquisition spend will generate profitable returns per customer.
Channel comparison
Compare unit economics across acquisition channels to allocate budget effectively.
Fundraising preparation
Present clear unit economics to demonstrate a scalable and sustainable business model.
Mastering unit economics
Unit economics measure the direct revenues and costs associated with a single unit of your business — typically one customer. If each customer generates more value than it costs to acquire and serve, you have a scalable business. If not, growing faster just means losing money faster.
The three key metrics are LTV (how much a customer is worth), CAC (how much it costs to acquire one), and payback period (how long until a customer repays their acquisition cost). A healthy SaaS business targets an LTV/CAC ratio above 3:1 and a payback period under 12 months.
Unit economics should improve as you scale. Economies of scale reduce CAC through brand recognition, word-of-mouth, and optimized marketing. If your unit economics are deteriorating as you grow, it signals a problem with product-market fit or go-to-market efficiency.
Common questions
What is a healthy LTV/CAC ratio?+
How do I calculate CAC payback period?+
Why are my unit economics negative?+
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