SaaS Metrics → Profitability

How the math works

Four numbers do almost all the work:

• LTV = (ARPU × gross margin) / monthly churn. $50 ARPU × 80% margin / 5% churn = $800 lifetime value. Churn is the biggest lever — going from 5% to 2% triples LTV.
• LTV/CAC ratio. ≥ 3 healthy, 1–3 marginal, < 1 broken (you lose money on every customer). David Skok's benchmark from a decade of SaaS data.
• CAC payback = CAC / (ARPU × margin). $200 CAC / ($50 × 80%) = 5 months. Bootstrappable SaaS lives below 12 months because that's when working capital recycles fast enough to grow without dilution.
• Months to day-job parity. Solve for n in currentMrr × (1+g)^n = takeHome / margin. The take-home divided by margin is what you actually need in MRR — gross profit, not revenue, replaces income.

The honesty correction. The "MRR replaces day job" math assumes 100% of gross profit becomes your salary. In practice you'll want a buffer for taxes (self-employment is 7.65% extra FICA), benefits ($600–1,200/mo for solo health insurance in the US), and a runway cushion (6 months of expenses minimum). Real replacement MRR is usually 1.4–1.6× the calculator's number.

Math runs locally. Inputs never leave your browser. Source on github.

Real-world scenarios

• CAC payback > 18 months means you can't bootstrap — even with $5K MRR — why working-capital math, not vanity metrics, decides if your SaaS is sustainable without funding.
• Cloud Bill Estimator — infra cost is what eats gross margin. A $300/mo AWS bill on $5K MRR is 6% of revenue, fine. On $1K MRR it's 30%, dead.
• Startup Runway — months to threshold only matters if your runway lasts that long. Pair this with the runway calculator before quitting.