CAC Payback Calculator
Calculate how many months of gross profit it takes to earn back CAC, with an optional churn check.
Use CAC Payback Calculator
This is gross-profit payback, not cash-flow payback, and assumes flat ARPU, margin and churn with no expansion revenue. Free, no sign-up. Runs in your browser; nothing you enter is uploaded.
How to use it
See how many months of gross profit it takes to earn back what you paid to win a customer, and whether customers stay that long.
- Enter CAC: sales and marketing spend divided by new paying customers.
- Add monthly ARPU and gross margin as a whole percentage.
- Add monthly churn to compare payback with customer lifetime, or leave it blank.
Formula
Monthly gross profit = monthly ARPU × gross margin / 100
CAC payback (months) = CAC × 100 / (monthly ARPU × gross margin)
Expected customer lifetime (months) = 100 / monthly churn %
Example
India SaaS: payback before churn
Customers stay well past the point where CAC is paid back.
- Customer acquisition cost
- ₹1,35,000
- Monthly ARPU
- ₹9,500
- Gross margin
- 82%
- Monthly churn
- 2.5%
Questions
What is a good CAC payback period?
There is no universal target in this calculator. Compare payback with your cash needs and how long customers stay. The check above 120 months is an Infinall guideline for spotting input mistakes, not an industry benchmark.
Why use gross margin instead of revenue?
Hosting, support and payment fees use part of each payment. Only the remaining gross profit repays acquisition cost. For example, CAC of 1,840 and monthly ARPU of 115 suggest 16 months using revenue alone, but at 72% gross margin payback takes 22.2 months.
Does monthly churn change the payback formula?
No. It adds expected lifetime: 100 divided by monthly customer churn %. If displayed payback is longer than displayed lifetime, the average customer may leave before CAC is recovered. This simplified lifetime check is not a churn-adjusted cohort cash-flow forecast.
What if customers prepay annually?
Divide annual revenue per customer by 12 for monthly ARPU. This measures gross-profit payback; annual prepayment can recover cash earlier than this monthly model suggests.
What happens with 0% gross margin or 0% churn?
Zero gross margin produces no gross profit, so payback is undefined. Monthly churn is optional, but if supplied it must be above 0%. Leave it blank rather than entering 0 to omit the lifetime estimate.
How is payback different from LTV:CAC?
Payback measures months until acquisition cost is recovered. LTV:CAC compares lifetime gross profit with acquisition cost. Use the LTV and LTV:CAC ratio calculators for that total-value view.
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