Unit Economics Calculator

Calculate Unit Economics step by step: LTV = (revenue per customer per month × gross margin) ÷ monthly churn; LTV:CAC = LTV ÷ CAC; CAC payback = CAC ÷ monthly gross profit per customer.

In short

Formula: LTV = (revenue per customer per month × gross margin) ÷ monthly churn; LTV:CAC = LTV ÷ CAC; CAC payback = CAC ÷ monthly gross profit per customer.

Complete the required fields to see the result.

What this calculator does

Calculate Unit Economics step by step: LTV = (revenue per customer per month × gross margin) ÷ monthly churn; LTV:CAC = LTV ÷ CAC; CAC payback = CAC ÷ monthly gross profit per customer. Worked example, questions and limitations included.

Use it to turn Currency (symbol only, never converted), Revenue per customer per month, Gross margin (your figure), Monthly churn (your measured rate), and the other shown inputs into a checked result you can compare, copy, or rerun with different assumptions.

The page shows the formula, a numeric worked example, and the assumptions that affect this business pricing calculation.

Inputs and what they mean

Currency (symbol only, never converted): — choice value.
Revenue per customer per month: — number value.
Gross margin (your figure): — number value.
Monthly churn (your measured rate): — number value.
Customer acquisition cost: — number value.

How to use it

Enter each value in the unit shown next to the box (use the unit converter first if your numbers are in other units).
Check the breakdown to see every intermediate step.
Read the limitations before relying on the result.

Formula

Simple constant-churn lifetime value; undiscounted.

No standard body defines LTV or CAC — conventions vary between companies.

Churn and margin must come from your own data; nothing is assumed.

LTV = (revenue per customer per month × gross margin) ÷ monthly churn; LTV:CAC = LTV ÷ CAC; CAC payback = CAC ÷ monthly gross profit per customer.

Inputs used: Currency (symbol only, never converted), Revenue per customer per month, Gross margin (your figure), Monthly churn (your measured rate), Customer acquisition cost.

Worked example

A subscription product

Monthly gross profit = $40.
LTV = 40 ÷ 0.04 = $1,000.
LTV:CAC = 3.33 : 1; payback 7.5 months.

Reading the result

The headline figure is the main answer. Any breakdown underneath shows the parts that make it up, so you can check the working and see what changes when you adjust an input.

Limitations and assumptions

Constant churn and revenue.
Undiscounted.
No authoritative standard for LTV/CAC.
Results are educational estimates built only from the figures you enter. They are not personalised investment, tax, legal or accounting advice. Rates, growth and discount assumptions are always yours to choose.
The result depends on the values you enter for this unit economics calculator; it does not supply missing rates, rules, prices, dates, or assumptions for you.

Common questions

Is 3:1 a target?

It is a widely quoted rule of thumb, not a standard. We do not judge your ratio.

Why use gross margin?

Revenue overstates what a customer contributes; gross profit is closer to the cash value. Check the formula, example, and limitations on this page before using the result for a real business pricing decision.

AI products?

The AI unit economics calculator handles per-request model costs. Check the formula, example, and limitations on this page before using the result for a real business pricing decision.

How do I use the Unit Economics Calculator?

Enter the required values for Currency (symbol only, never converted), Revenue per customer per month, Gross margin (your figure), Monthly churn (your measured rate), Customer acquisition cost. The calculator applies the formula on this page and shows the main result with any supporting breakdown so you can check the arithmetic.

What formula does the Unit Economics Calculator use?

LTV = (revenue per customer per month × gross margin) ÷ monthly churn; LTV:CAC = LTV ÷ CAC; CAC payback = CAC ÷ monthly gross profit per customer. The visible formula section above lists the calculation path and the edge cases the page handles, so the result can be checked without relying on the form alone.

Can the Unit Economics Calculator be used for exact decisions?

Use it as a calculation aid, not as a substitute for checking the underlying rule, contract, policy, or professional advice that applies to your situation. When a result depends on local rules, personal details, prices, or dates, enter those values yourself and confirm them before acting.