Knowledge Base

Name: Prodwave
Availability: InStock
Author: Prodwave

Unit Economics

Economics of a single customer — how much it costs to acquire, how much revenue they generate, and how quickly they pay back.

\text{ARPU} = \frac{\text{Total Income}}{\text{Active Customers}}

Average revenue per active user per month. Includes all revenue streams.

How we calculate in Prodwave: ARPU = totalMonthlyIncome / activeCards. Calculated for each month, plus the average over the entire forecast period.

Affects: LTV, Unit Economics, monetization assessment

\text{LTV} = \frac{\text{ARPU} \times \text{Gross Margin}}{\text{Churn Rate} / 100}

Lifetime Value — the total revenue a customer generates over their entire product usage period (accounting for margins).

How we calculate in Prodwave: LTV = (ARPU × Gross Margin Rate) / (churnRate / 100). The formula assumes stable ARPU and churn.

Affects: LTV/CAC, investment attractiveness, monetization strategy

\text{LTV/CAC} = \frac{\text{LTV}}{\text{CAC}}

The ratio of customer lifetime value to acquisition cost. The main indicator of business model health.

How we calculate in Prodwave: LTV/CAC = LTV / CAC. Target value > 3 (customer generates at least 3x their acquisition cost).

Affects: Marketing scaling decisions, business model viability assessment

\text{CAC Payback} = \frac{\text{CAC}}{\text{ARPU} \times \text{Gross Margin}}

The number of months it takes for customer revenue to recoup their acquisition cost. Shows the working capital burden.

How we calculate in Prodwave: CAC Payback = CAC / (ARPU × Gross Margin Rate). Result in months. Target value < 12.

Affects: Working capital requirements, Cash Runway

Comprehensive analysis of economics at the individual customer level. Answers the question: "Does each acquired customer generate profit?"

How we calculate in Prodwave: Calculated automatically from all metrics: ARPU, CAC, LTV, LTV/CAC, CAC Payback. The dashboard shows dynamics by month.