CAC payback

How many months it takes to recoup the cost of acquiring a customer: the point where cumulative gross profit from the customer equals what you spent to win them. Under 6 months is excellent, 6 to 12 healthy, 12 to 24 acceptable, beyond 24 concerning for B2B SaaS. B2C targets closer to 3 months; enterprise motions stretch to 18-24.

Simple: CAC Payback (months) = CAC / (ARPA x Gross Margin). Company level: S&M Spend / (New ARR x Gross Margin) x 12

The simple formula assumes constant revenue. The preferred method is cohort-based: plot a cohort's cumulative gross profit against the S&M spent to acquire it, and the crossover is the payback. Annual upfront billing can pull payback forward if the first invoice exceeds CAC. These tools use the trailing-12-month convention with a 75% default gross margin, editable.