SaaS unit economics template
Unit economics answer one question: does each customer make you money, and how fast? Growth without healthy unit economics is just lighting cash on fire faster. Here's the model a unit-economics template should encode, and how to read it.
The four numbers at the core
- ARPU — average revenue per user/account per month = MRR ÷ active accounts.
- Gross margin — (revenue − cost to serve) ÷ revenue. Cost to serve = hosting, support, payment fees.
- CAC — fully loaded sales + marketing spend ÷ new customers.
- Churn — monthly revenue churn, which sets the customer lifetime.
Derived metrics
From those four you derive the verdicts:
- LTV = (ARPU × gross margin) ÷ monthly churn.
- LTV:CAC = LTV ÷ CAC. Aim for ~3:1.
- CAC payback (months) = CAC ÷ (ARPU × gross margin). Aim for under 12.
- Quick ratio = (new + expansion MRR) ÷ (churned + contracted MRR). Above 4 is strong.
Worked example
ARPU $120/mo, gross margin 80%, monthly churn 3%, CAC $700.
- LTV = ($120 × 0.8) ÷ 0.03 = $3,200.
- LTV:CAC = $3,200 ÷ $700 = 4.6:1.
- CAC payback = $700 ÷ ($120 × 0.8) = 7.3 months.
That's a healthy profile: you recover acquisition cost in about 7 months and earn it back 4–5x over the customer's life.
The mistakes that hide bad economics
- Computing LTV on revenue, not gross profit — inflates LTV and every ratio.
- Understating CAC by excluding salaries and tools.
- Using early-cohort churn (artificially low) instead of mature churn.
- Reading LTV:CAC without CAC payback — a great ratio with a 24-month payback still strains cash.
Why a template helps
These formulas are interdependent — change churn and LTV, payback and the ratio all move. A template wires them together so you can stress-test: "if churn rises to 5%, are we still healthy?" Doing that by hand each time invites arithmetic errors that quietly mislead a pricing or hiring decision.
The template we recommend models ARPU, margin, CAC, churn and the full set of derived unit-economics metrics together, so a change in any input flows correctly through to the verdict.
Skip the blank spreadsheet. SaaSDash is a plug-in SaaS metrics dashboard: paste your billing export and it computes MRR, ARR, churn, expansion, ARPU, LTV, CAC payback, quick ratio and runway on one screen, with a formulas-explained tab so you can trust every number.
Get SaaSDash — SaaS Metrics Dashboard ($29) → Frequently asked questions
What are SaaS unit economics?
The per-customer profitability of your business: ARPU, gross margin, CAC and churn, plus the derived LTV, LTV:CAC ratio, CAC payback period and quick ratio that tell you whether growth makes money.
How do you calculate LTV in a unit-economics model?
LTV = (ARPU × gross margin) ÷ monthly churn rate. Using revenue instead of gross profit overstates LTV and inflates every downstream ratio.
What's a healthy CAC payback period?
Under 12 months is healthy. It's CAC ÷ (ARPU × gross margin) — the months of gross profit needed to recover the cost of acquiring a customer.
Page built 2026-06-14 from public, dated buying-intent signals. Updated as new signals land.
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