Definition
What is LTV and CAC?
CAC (customer acquisition cost) is what it costs to win one customer; LTV (lifetime value) is the gross profit a customer brings over their lifetime. A healthy business earns much more from a customer than it spends to acquire them.
The LTV:CAC ratio and the CAC payback period (months of gross profit to recover acquisition cost) are common unit-economics checks.
General information, not legal, tax or investment advice.