CAC Payback Calculator

What is CAC Payback?

CAC payback measures how many months of gross profit from a typical customer it takes to recover acquisition cost. It connects unit economics to cash timing, a metric boards ask for alongside LTV:CAC.

Formula

Version v1. See methodology and the public formula repo for sources and change history.

Worked example

Using the default example inputs (CAC: $6,000; Monthly ARPA: $1,000; Gross margin: 80%), CAC Payback equals 7.5 months (CAC payback). Shorter payback periods free cash faster and reduce growth risk.

What good looks like

Sub-12-month payback is a common benchmark for efficient B2B SaaS, but stage and ACV matter. Very long payback strains cash even when LTV:CAC looks strong on paper.

Directional guidance only, not a cohort benchmark claim. Premium cohort bands appear when sample thresholds are met for your profile.

Read the CAC Payback benchmark guide for methodology, cohort percentiles, and how participant bands differ from public guidance.

FAQ

What is CAC Payback?

CAC payback measures how many months of gross profit from a typical customer it takes to recover acquisition cost. It connects unit economics to cash timing, a metric boards ask for alongside LTV:CAC.

What is the CAC Payback formula?

CAC payback = CAC / (ARPA * Gross margin)

Why use gross margin in payback?

Gross margin reflects the profit available to recover CAC after delivery cost. Using revenue alone overstates how fast you truly break even on a customer.

What is ARPA in this formula?

Average revenue per account per month. Use the recurring revenue attributable to one customer, not one-off services unless they are core to the model.

How does payback relate to LTV:CAC?

LTV:CAC shows lifetime efficiency; payback shows how quickly cash returns. Both should move in a sensible direction before you scale spend.