CAC Payback Period Calculator
Estimate how many months it takes to recover CAC via gross profit.
Prefer an explanation? Read the guide.
CAC: How to calculate Customer Acquisition CostLTV: How to estimate Lifetime Value (and when not to)CAC Payback Period: What it means and how to improve it
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Tip: you can type commas (e.g., 10,000).
Example
Using the default inputs, the result is:
3.1 months
- CAC
- $500
- ARPA per month
- $200
- Gross margin
- 80%
Formula
Payback (months) = CAC ÷ (ARPA × Gross Margin)
- ARPA and gross margin remain stable over the payback period.
FAQ
Should payback include onboarding costs?
If onboarding costs are significant and variable per customer, include them in CAC so payback reflects full acquisition cost.
How to interpret
How to interpret payback
- Shorter payback improves cash efficiency and reduces risk.
- Compare payback by channel—some channels are slow but scalable.
- Pair with churn: long payback + high churn is dangerous.
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