Payback period
Estimate the months needed to recover CAC from contribution profit. Includes an expected lifetime sanity check.
Inputs
Payback uses contribution profit per month = ARPA × gross margin. It also estimates expected lifetime to sanity‑check whether payback is feasible.
Results
Payback (months)
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Contribution profit / month
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Expected lifetime (months)
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Interpretation
Enter numbers to see interpretation.
How to interpret
Payback period answers: “How many months of contribution profit do we need to recover CAC?”
- Contribution profit / month = ARPA × gross margin
- Payback = (CAC + setup cost) / contribution profit per month
Shorter payback means you can reinvest faster, tolerate more volatility and scale more safely.
Practical heuristics
- < 3 months: very strong (often room to scale spend).
- 3–12 months: common for SaaS (depends on cash and growth).
- > 12 months: risky unless churn is low and cash is abundant.
Also check that expected lifetime (≈ 1/churn) is comfortably above payback. If churn is 10% monthly (≈ 10 months lifetime), a 14‑month payback can’t work.
Deep dive: CAC payback guide.