An LTV to CAC calculator that measures on gross profit, not revenue, and shows your payback and the first 30 days.
5.0(1 rating)Compare what a customer is worth with what they cost to get, on gross profit, the way Alex Hormozi measures it. See the ratio, the payback and the first 30 days.
Your numbers
Your ratio and payback
This free LTV to CAC calculator compares what a customer is worth with what they cost to get, on gross profit, the way Alex Hormozi measures it.
Enter your price, how often customers buy, your margin and your cost to get a customer. See your LTGP to CAC ratio, the revenue ratio most calculators show, your payback and the first 30 days.
Here's what the ratio means, why gross profit beats revenue, and what a good ratio is.
What is the LTV to CAC ratio?
The LTV to CAC ratio compares a customer's lifetime value (LTV) with your customer acquisition cost (CAC): LTV ÷ CAC.
A ratio of 3 to 1 means a customer brings in 3 times what they cost to get. Below 1 to 1, each new customer loses you money.
Why gross profit, not revenue
Most LTV calculators use revenue. Hormozi uses gross profit, what's left after the cost to deliver:
I measure paid ad efficiency by comparing the lifetime gross profit of a customer (LTGP) with the cost to acquire a customer (CAC).
Revenue flatters a business with thin margins. Gross profit is the money that actually pays for ads, rent and payroll, so the calculator leads with LTGP to CAC and shows the revenue ratio next to it.
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How to use the LTV to CAC calculator
Your numbers stay in this browser and carry over to the money model generator.
What is a good LTV to CAC ratio?
Hormozi's line is 3 to 1, and he's clear it's something he observed, not a rule:
| LTGP to CAC | What it means |
|---|---|
| Below 1 to 1 | Each customer loses money over their life |
| 1 to 3 | Profitable, but slower to scale |
| 3 to 1 or more | Where Hormozi sees businesses take off |
An example
A $100 monthly membership, kept 8 months on average, at a 75% margin, with customers costing $150 to get:
| Number | Result |
|---|---|
| Lifetime revenue | $800 |
| Lifetime gross profit | $600 |
| LTGP to CAC | 4 to 1 |
| LTV to CAC (revenue) | 5.3 to 1 |
| CAC payback | 2 months |
The revenue ratio says 5.3; the gross profit ratio says 4. Both clear 3, but the gap grows as margins shrink.
How to raise the ratio
There are only 2 levers: lower what a customer costs, or raise what they're worth. Raising what they're worth is usually easier, with an upsell, a downsell for the people who say no, and continuity.
A great ratio can still run out of cash if the profit arrives slowly. The CAC payback calculator shows how fast you earn the cost back, and the money model generator designs the offers that bring it in sooner.
LTV to CAC Calculator FAQs
Questions about the lTV to CAC calculator? Here's what to know.
An LTV to CAC calculator compares what a customer is worth over their life with what they cost to get.
This LTV to CAC calculator uses gross profit, the way Alex Hormozi measures it, and shows the revenue ratio next to it.
Alex Hormozi's line is 3 to 1 on lifetime gross profit: the businesses he invests in tend to take off above it.
He calls it a pattern he observed, not a rule.
Below 1 to 1, each customer loses money.
LTGP is lifetime gross profit: everything a customer spends with you, minus what it costs to deliver it.
The LTV to CAC calculator uses it because it's the money that actually pays for getting more customers.
Multiply the price by how many times a customer buys to get lifetime revenue, multiply that by your gross margin to get lifetime gross profit, then divide by what a customer costs to get.
The LTV to CAC calculator does both ratios.
LTV usually means lifetime revenue from a customer.
LTGP is lifetime gross profit, after the cost to deliver.
The LTV to CAC calculator shows both, and leads with LTGP.
Yes, the LTV to CAC calculator is free, with no login and no limit.
It runs in your browser, and nothing you enter is sent anywhere.
The CAC payback calculator shows how fast a customer pays back, and the money model generator designs offers that raise both numbers.
See all my free tools.
Navid Moazzez
AI business strategist & AI OS builder
Navid Moazzez helps creators and founders master AI and build their own AI Operating System (AI OS) to automate their business and life.
Navid.me is reader-supported. When you buy through links on this site, I may earn an affiliate commission. Learn more.
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