CAC Payback Period
The number of months it takes for the gross profit from a new customer to repay the cost of acquiring them.
CAC payback period measures how long, in months, it takes a company to recover the cost of acquiring a customer through the gross profit that customer generates. Shorter payback means capital gets recycled into new growth faster, which matters enormously for how much external financing a growth strategy requires.
This metric is closely watched by growth-stage and later investors specifically because it captures capital efficiency in a way that raw growth rate doesn't — two companies growing at the same rate can have very different capital needs depending on how quickly each dollar spent on acquisition gets repaid.
CAC payback period (months) = CAC / (average monthly revenue per customer x gross margin %)CAC is $6,000, average monthly revenue per customer is $500, and gross margin is 80%. Monthly gross profit per customer = $500 x 0.80 = $400. Payback period = $6,000 / $400 = 15 months.
Under 12 months payback is considered strong for B2B SaaS, and under 18 months is generally acceptable — payback periods stretching past 24 months put real pressure on cash and are a common reason growth-stage rounds get repriced down.
What's a good CAC payback period?
Under 12 months is considered excellent for B2B SaaS, 12-18 months is generally acceptable, and payback periods beyond 24 months typically draw serious investor scrutiny.
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