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Payback Period Calculator

Calculate time to recover customer acquisition cost

Payback Period measures how many months it takes to recover your Customer Acquisition Cost (CAC) through gross margin. A shorter payback period means faster reinvestment capacity and better cash flow management.

Your Data

$
$/month
%

Formula used:

Payback = CAC / (ARPU × Gross Margin)

Result

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SaaS Benchmarks

< 6 monthsExcellent
6 - 12 monthsGood
12 - 18 monthsAcceptable
> 18 monthsProblematic

Optimization Tips

  • VCs typically want payback under 12 months
  • Shorter payback = faster reinvestment in growth
  • Improve payback by reducing CAC or increasing ARPU
  • High payback periods strain cash flow significantly

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Related Metrics

CACLTVLTV/CAC RatioGross Margin

How to Use This Calculator

Payback Period is calculated by dividing your CAC by the monthly gross profit per customer (ARPU multiplied by gross margin percentage).

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