Recover acquisition spending through gross profit.
CAC payback compares acquisition cost with the gross profit generated by a customer each month. Using revenue alone understates the recovery period because delivering the product consumes resources.
This simplified payback holds revenue and margin constant and ignores churn during recovery. A ten-month estimate is not useful if most customers leave before month ten. Cohort cash collections can also differ from gross profit.
The formula, made clear.
- Monthly gross profit
- Monthly customer revenue multiplied by gross margin as a decimal.
- Payback
- Undiscounted time to recover acquisition cost at the current gross-profit rate.
Put the numbers in context.
$2,000.00 CAC divided by $200.00 monthly revenue at 80% margin gives 12.5 months.
| Input | Example value |
|---|---|
| Customer acquisition cost | $2,000.00 |
| Monthly revenue per customer | $200.00 |
| Gross margin | 80% |
| Gross-profit CAC payback | 12.5 months |
What this calculation assumes
Constant ARPU and margin, no churn, expansion, financing costs or discounting. Zero CAC requires zero recovery time; positive CAC with zero gross profit has no finite payback.
What to consider next.
Compare payback with customer retention, cash runway and acquisition-channel cohorts.
How we approach financial models →