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Target CPA from LTV Calculator

Translate LTV and contribution margin into a target CPA (and break-even CPA) for paid acquisition.

A 'good' CPA depends on how much value a customer creates. Target CPA connects acquisition cost to unit economics so you can scale profitably.

This calculator computes break-even CPA from LTV and contribution margin, and also a target CPA based on desired profit buffer or payback fraction.

Prefer an explanation- Read the guide.
Related definitions:cpacacltvcontribution marginpayback periodincrementality
Target CPA: how to set acquisition targets from LTV and marginPaid ads bidding & budgeting hub: max CPC, target CPA, and break-even targetsCAC vs CPA: definitions, formulas, and when to use eachMax CPC and break-even CPC: how to set bidding targets from margin
If you already have gross profit LTV, set margin to 100%.
$
 
%
Profit buffer as % of gross profit LTV (e.g., 20% means spend <= 80% of gross profit LTV).
%
If you prefer a simple rule: set a max share (e.g., 50%). 0 disables.
%
Tip: you can type commas (e.g., 10,000).

Example

Using the default inputs, the result is:
$1,440.00
Revenue LTV (lifetime revenue)
$3,000
Contribution margin
60%
Target profit buffer (optional)
20%
Max spend as % of gross profit LTV (optional)
0%

How to calculate

  1. Enter gross profit LTV (or revenue LTV and margin).
  2. Choose how conservative you want to be (target profit buffer or spend as % of LTV).
  3. Use break-even and target CPA to set bidding/optimization targets.

Formula

Gross profit LTV = revenue LTV x contribution margin; Break-even CPA = gross profit LTV; Target CPA = break-even x (1 - buffer) or x spend share
  • LTV is measured on a consistent basis with your CPA attribution window.
  • Contribution margin reflects variable costs (not fixed overhead).
  • Incrementality may be lower than attribution; validate with experiments when possible.

FAQ

Should I use CAC or CPA-
CPA is often used at the campaign level (purchase/lead). CAC usually means cost per new paying customer. Use the denominator that matches your funnel stage and label it clearly.
Why set a target below break-even-
Because forecasts are uncertain and you usually need buffer for returns, fraud, attribution bias, and overhead. A target CPA below break-even reduces the risk of scaling into losses.

Common mistakes

  • Using revenue LTV instead of gross profit LTV (overstates value).
  • Ignoring cash/payback constraints (long payback can kill runway).
  • Using platform-attributed LTV without incrementality validation.

Related calculators

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Calculate Return on Ad Spend (ROAS) and estimate contribution profit after ad spend.
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Break-even ROAS Calculator
Estimate the break-even ROAS based on contribution margin assumptions.
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Target ROAS Calculator
Estimate a target ROAS to cover variable costs plus a desired margin buffer.
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Paid Ads Funnel Calculator
Model CPM -> CTR -> CVR to estimate CPC, CPA, ROAS, and profit per 1,000 impressions (with margin and variable costs).
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ROI Calculator
Calculate Return on Investment (ROI) for a campaign or project.
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Incrementality Lift Calculator
Estimate incremental conversions, incremental ROAS, and incremental profit from a holdout test.

Quick checks

  • Keep attribution model and window consistent when comparing campaigns.
  • Pair efficiency metrics (ROAS/CPA) with profit assumptions (margin, refunds, fees).
  • Validate tracking after site changes (pixels/events can silently break).