Metric guide · Growth efficiency
LTV to CAC ratio
Short answer
The LTV to CAC ratio compares the value a customer brings in with the cost of acquiring them. Sondola calculates it as 12-month customer value, or LTV, divided by CAC. A ratio above 1 means a customer returns more than they cost within a year. Capping LTV at 12 months keeps the figure grounded in observed behavior.
The formula
LTV to CAC = 12-month LTV per customer ÷ CAC
Unit: Ratio. Better when it goes up.
Enter CAC, revenue per customer and gross margin to see months to payback and LTV to CAC.
Open the calculatorHow to calculate it
- Pick a group of customers who first paid in the same month, at least 12 months ago.
- Sum the margin or net revenue those customers generated in their first 12 months and divide by the number of customers in the group.
- Calculate CAC for the period in which that group was acquired.
- Divide 12-month LTV by CAC.
Mistakes that distort it
Dividing ARPU by churn assumes churn never changes and can produce huge values from a few good months. A fixed 12-month window uses what customers actually paid.
Compare the LTV of a group of customers with the CAC that acquired it. Pairing an old group's LTV with this month's CAC mixes different conditions.
Store fees, refunds and payment costs reduce what you keep. Use net revenue or margin, and state which one you used.
Where Sondola reads it from
Sondola reads this metric from RevenueCat, Stripe, Meta Ads and Apple Ads, with the source and period on every reading. Each reading keeps where it came from, the period and the date it was recorded, and you can download all of it at any time.
See all 34 integrations →Questions
Why use 12-month LTV rather than an open-ended LTV?
An open-ended LTV for a young company is a projection, often from little data. A 12-month figure can be checked against real payments.
Can I calculate LTV to CAC before I have a year of data?
You can calculate a shorter-window ratio, such as 90 days, but label it with its window. It will be lower than a 12-month figure and is not comparable with one.
Related metrics
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