Result
CAC payback period
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This calculation is for informational purposes only and does not replace advice from a qualified professional. Formulas and rates may not fit your exact situation — double-check the figures before making decisions.
How it is calculated
Monthly gross profit per customer = ARPU × gross margin ÷ 100. CAC payback period = CAC ÷ monthly gross profit. The metric answers how many months a customer needs to stick around to at least break even on the money spent acquiring them.
The calculation uses gross profit, not revenue — using ARPU without a margin adjustment understates the payback period and creates a false sense of faster recovery than actually exists.
The shorter the payback period, the less money a business risks while scaling: if it's noticeably shorter than the average customer lifespan, the company has time left over to earn profit beyond recovering the acquisition cost.