Description

The CAC payback period is one of the most important SaaS metrics — and a top investor metric used in boardrooms, fundraising, and valuation discussions. But here’s the nuance: which gross profit should you use when calculating it?

In episode #307, Ben Murray explains why CAC payback must be gross margin adjusted and why using your company’s total blended gross margin is a mistake. Instead, you’ll learn how to align ARR, MRR, and revenue streams with their specific gross profit to get an accurate picture of sales efficiency and scalability.

This lesson is especially critical for scaling SaaS and AI businesses as miscalculations here can distort your financial model, mislead investors, and even impact your company's valuation.

What You’ll Learn

• Why CAC payback is a must-have metric in your financial dashboard.
• The correct gross profit to use in CAC payback calculations.
• How to calculate CAC payback when you have multiple revenue streams (subscription, usage, services, hardware).
• Why large SaaS companies may need segmented CAC payback periods for different products or business units.
• How an accurate accounting foundation prevents “accounting debt” that complicates metrics and valuation later.

Why It Matters

• Investors rely on CAC payback to judge efficiency and growth potential.
• Using the wrong gross profit skews results and undermines trust in your financial metrics.
• Clean accounting systems and segmentation enable accurate benchmarking, which strengthens your story in fundraising and valuation discussions.

Resources Mentioned

📄 Blog Post: How to calculate CAC payback the right way (with examples): https://www.thesaascfo.com/how-to-calculate-cac-payback-period-with-variable-revenue/

🎓 SaaS Metrics Course: https://www.thesaasacademy.com/the-saas-metrics-foundation-course-community-phased

Quote from Ben

“You can’t just throw total company gross profit into CAC payback. It has to be tied directly to the revenue stream — otherwise the metric is meaningless.”