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Ми працюємо над детальним навчальним посібником для SaaS Unit Economics Calculator. Поверніться найближчим часом, щоб переглянути покрокові пояснення, формули, приклади з реального життя та поради експертів.
The SaaS Unit Economics Calculator computes the four most-watched financial health metrics for SaaS businesses: LTV/CAC ratio (customer lifetime value vs acquisition cost), CAC Payback Period (months to recover acquisition spend), Magic Number (sales & marketing efficiency), and Burn Multiple (capital efficiency relative to ARR growth). These metrics form the standard framework that VCs use to evaluate SaaS investment readiness and that operators use to gauge whether their go-to-market motion is healthy. Together, they distinguish capital-efficient growth from unprofitable growth. The metrics emerged from research in the 2010s SaaS investment boom. David Skok's 'SaaS Metrics 2.0' established LTV/CAC as the foundational ratio. Scale Venture Partners introduced 'Magic Number' as the quarterly sales efficiency measure. The Burn Multiple was popularized by Craft Ventures in the 2020s as growth-stage capital efficiency became a sharper focus during the post-2021 SaaS valuation correction. Together, these four metrics provide a complete picture: are individual customers profitable (LTV/CAC), are you recovering acquisition costs fast enough (CAC Payback), is sales & marketing capital efficient (Magic Number), and is overall capital efficiency healthy (Burn Multiple)? Understanding these metrics is essential for SaaS operators making decisions about pricing, marketing spend, sales hiring, and fundraising. Each metric reveals a different aspect of business health. A company with LTV/CAC 5x (excellent) but Burn Multiple 4 (poor) is unit-economic but burning capital inefficiently — possibly overhiring beyond what current revenue supports. A company with Magic Number 1.2 (excellent) but CAC Payback 30 months (poor) has efficient sales but expensive customer acquisition relative to monthly revenue. The four metrics together identify exactly where the business needs to focus optimization. This calculator takes the inputs needed for all four metrics: CAC and ARPU for ratio metrics, churn for LTV calculation, and quarterly New ARR, S&M spend, and net burn for Magic Number and Burn Multiple. Output displays each metric with health benchmarks color-coded — excellent (green), good (lime), concerning (orange), poor (red). Use the calculator quarterly to track health trends, before fundraising to assess investor narrative, or when evaluating major strategic shifts (pricing changes, sales hiring waves, marketing channel investments).
LTV = ARPU × Gross Margin / Monthly Churn; LTV/CAC = LTV / CAC; CAC Payback = CAC / (ARPU × Gross Margin); Magic Number = (New ARR × 4) / (Prior Q S&M × 3); Burn Multiple = Quarterly Net Burn / Quarterly Net New ARR
- 1Step 1 — Enter CAC and ARPU: CAC = total fully-loaded sales & marketing spend / new customers acquired in same period. Include all S&M costs: ad spend, marketing tools (HubSpot, Salesforce, ads), payroll for sales and marketing staff, sales commissions, content production. ARPU = total monthly recurring revenue / total customers. Use trailing 3-month average for stability.
- 2Step 2 — Enter Gross Margin Percentage: Calculate as (Revenue − Cost of Revenue) / Revenue × 100. Cost of revenue for SaaS includes hosting/infrastructure (AWS, GCP), customer support, payment processing fees, third-party software directly serving customers, and customer success team for accounts. Typical SaaS gross margins: 70-85%.
- 3Step 3 — Enter Monthly Churn Rate: Calculate as (Customers Cancelled in Month / Customers at Start of Month) × 100. For Net Revenue Retention focus: include downgrade revenue impact. For pure logo retention: count only customers leaving entirely. Most SaaS companies report both. SMB SaaS averages 2-5% monthly; enterprise 0.5-1%.
- 4Step 4 — Compute LTV: LTV = ARPU × Gross Margin / Monthly Churn. For ARPU $50, 80% margin, 3% churn: LTV = $50 × 0.80 / 0.03 = $1,333. This is simple LTV — assumes constant churn and ARPU. Real LTV accounts for expansion (ARPU grows over time) and cohort retention (churn varies by tenure). Use for benchmarking; production financial models use cohort curves.
- 5Step 5 — Compute LTV/CAC Ratio: LTV/CAC = LTV / CAC. Targets: <1 (unprofitable, fix urgently), 1-2 (concerning), 2-3 (acceptable), 3+ (healthy), 5+ (excellent, possibly under-investing in growth). Most successful SaaS companies target 3-5x. Going much higher often indicates underinvestment in growth that could increase total enterprise value.
- 6Step 6 — Compute CAC Payback Period: Months = CAC / (ARPU × Gross Margin). Time required for a customer's gross-margin contribution to repay their acquisition cost. Targets: <12 months excellent, 12-18 months good, 18-24 months concerning, >24 months poor. Cash flow critical at growth stage — short payback means each customer becomes profitable quickly enabling faster reinvestment.
- 7Step 7 — Magic Number and Burn Multiple: Magic Number = (New ARR × 4) / (Prior Quarter S&M × 3). Measures sales efficiency: >1 means each dollar of S&M generates more than $1 in new annualized ARR. Burn Multiple = Quarterly Net Burn / Quarterly Net New ARR. Measures capital efficiency: 1 means $1 burn per $1 of new ARR. Both have clear excellent/good/concerning/poor color-coded benchmarks.
Mixed signals — strong unit economics, capital-inefficient overall
Each customer's economics are healthy: LTV $1,333 vs $500 CAC = 2.67x. Sales efficiency is excellent: $80k S&M produced $400k annualized New ARR (Magic 1.67). However, total burn ($450k quarterly) is 5.6x the $80k net new ARR — likely overhiring beyond what current revenue supports. Strategic implication: customer-level economics work; need to either grow faster (more S&M to capture more customers at the healthy CAC) or reduce burn (cut headcount in non-S&M functions).
All metrics in healthy ranges — clear path to profitability
Enterprise economics: longer sales cycles ($2,000 CAC), higher ACV ($200/mo = $2,400 ARR per customer), low churn (1% monthly = 11.4% annual). LTV/CAC of 8.5x signals customers are highly profitable individually. Magic Number 2.22 = $1 of S&M generates $2.22 in new ARR. Burn Multiple 1.67 = good capital efficiency. This profile attracts VC funding easily at premium valuations.
Critical — losing money on every customer, need fundamental fixes
Every metric is poor. LTV $450 vs CAC $1,500 means losing $1,050 per customer acquired. CAC Payback of 67 months means most customers churn before becoming profitable. Magic Number 0.44 = S&M is inefficient. Burn Multiple 20 = burning $20 for every $1 of new ARR. Required actions: (1) Reduce CAC drastically — likely paid acquisition is too expensive, shift to product-led or community-led growth. (2) Increase ARPU — pricing is too low for the costs. (3) Reduce churn — invest in onboarding and retention. (4) Restructure team to reduce burn.
Bootstrap profile — excellent unit economics, modest capital usage
Bootstrap/profitable SaaS profile: low CAC through product-led growth, healthy ARPU, very low churn, high gross margin. LTV/CAC 11.3x suggests room to invest more in growth (CAC could grow 2-3x while maintaining healthy unit economics). CAC Payback 4.4 months means each customer pays back acquisition quickly, enabling rapid reinvestment. Burn Multiple 2.25 reflects ongoing investment despite revenue growth — appropriate for a company prioritizing growth over current profitability.
SaaS founders evaluating product-market fit and growth strategy economics before scaling go-to-market spend
VCs assessing investment readiness using standardized metrics framework across portfolio companies
Operators identifying which lever (CAC, churn, ARPU, margin) to optimize first for greatest business health impact
Board reporting and investor updates — these four metrics are standard quarterly reporting metrics for SaaS companies
Strategic planning — comparing current metrics against target metrics 12-24 months out to plan operating model changes
| Metric | Excellent | Good | Concerning | Poor |
|---|---|---|---|---|
| LTV/CAC Ratio | 5x+ | 3-5x | 1-3x | <1x |
| CAC Payback (months) | <12 | 12-18 | 18-24 | >24 |
| Magic Number | 1.5+ | 0.75-1.5 | 0.25-0.75 | <0.25 |
| Burn Multiple | <1 | 1-2 | 2-3 | >3 |
| Annual Churn (SMB) | <5% | 5-10% | 10-20% | >20% |
| Annual Churn (Enterprise) | <3% | 3-7% | 7-15% | >15% |
| Gross Margin | 85%+ | 75-85% | 65-75% | <65% |
What's a good LTV/CAC ratio?
Industry standard benchmarks: 3x is healthy, 4-5x is excellent, below 1x means losing money on each customer. Most SaaS companies should target 3-4x — going much higher (10x+) often signals under-investing in growth that could increase total enterprise value. The ratio should remain stable or improve as the company scales; declining LTV/CAC over time indicates degrading unit economics that needs attention.
How is the Magic Number interpreted?
Above 1.5 = scale aggressively (S&M is highly efficient). 1.0-1.5 = healthy growth. 0.5-1.0 = scale carefully, optimize. Below 0.5 = fix product-market fit before scaling. The metric was popularized by Scale Venture Partners in the early 2010s and is now standard at most SaaS VCs. The metric was designed for quarterly evaluation of sales productivity and has stood the test of multiple market cycles.
What's a healthy Burn Multiple?
Best: <1 (capital-efficient growth — each $1 burn generates $1+ ARR). Good: 1-2. Suspect: 2-3 (need to verify growth is sustainable). Poor: >3 (burning capital without commensurate ARR growth). Top SaaS startups achieve <1 in early stages; many established companies operate at 1-2; growth-stage companies hovering above 3 face scrutiny in current capital markets. Burn Multiple became more important post-2021 SaaS correction.
Why is the simple LTV formula inaccurate at high churn?
ARPU × Gross Margin / Monthly Churn assumes constant churn forever — geometric series sum. At low churn (1-2%), this works reasonably. At high churn (>5%), the formula overstates LTV because real-world churn often increases over time (cohort decay) and customers don't actually stay forever. For high-churn businesses, use cohort retention curves: track 1-month, 3-month, 6-month, 12-month retention by cohort and compute actual revenue retained.
Should I report blended CAC or paid CAC?
Both, but use paid CAC for marketing decisions. Blended CAC includes all customers (organic + paid), which artificially lowers CAC and hides marketing efficiency. Paid CAC = paid acquisition spend / paid acquisitions. This is the metric that should improve with marketing optimization. Investors typically ask for both — blended for unit economics overall, paid for marketing efficiency analysis.
How do I improve unit economics if metrics are poor?
Three primary levers: (1) Reduce CAC — shift to lower-cost channels (content, SEO, product-led growth), improve conversion rates, optimize ad targeting. (2) Increase ARPU — raise prices (often the highest-leverage change), introduce expansion revenue (upsells, seat-based pricing, usage-based add-ons). (3) Reduce churn — improve onboarding (largest lever), add features customers want, add proactive customer success outreach. Each lever can typically deliver 20-50% improvement when applied effectively.
How often should I track these metrics?
Monthly for operational metrics (CAC, ARPU, churn), quarterly for Magic Number and Burn Multiple. Track trends over time — single-point readings are noisy. The direction of metrics matters as much as the absolute value. Many SaaS companies build monthly investor updates around these four metrics, building stakeholder understanding of business health over time.
Порада профі
Track these four metrics monthly — they change quickly with sales motion adjustments and small operational changes. Most important early-stage metric: LTV/CAC. Most important growth-stage metric: Burn Multiple. Both signal whether the business model is fundamentally sound or needs structural changes. Use the comparison feature to model what improvements in each input would do to outputs before committing to operational changes.
Чи знаєте ви?
The 'Magic Number' got its name because no one initially knew what to call the formula when Scale Venture Partners first identified it. Engineers debating in early meetings just called it 'the magic number' because it seemed to predict SaaS company success better than any individual metric — and the name stuck. The 2015-2020 SaaS boom validated the metric's predictive power; most companies above Magic Number 1.0 grew successfully, most below 0.5 struggled or pivoted. The metric remains a standard component of VC due diligence in 2024.