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Financial Metrics

CAC (Customer Acquisition Cost)

Sales and marketing spend divided by new customers acquired.

In depth

CAC payback period = CAC ÷ monthly gross profit per customer. Strong businesses recover CAC in 12 months or less. Rising CAC across an industry signals saturation. LTV/CAC ratio of 3+ is generally considered healthy.

Frequently asked about CAC (Customer Acquisition Cost)

What is CAC (Customer Acquisition Cost)?

Sales and marketing spend divided by new customers acquired. CAC payback period = CAC ÷ monthly gross profit per customer. Strong businesses recover CAC in 12 months or less. Rising CAC across an industry signals saturation. LTV/CAC ratio of 3+ is generally considered healthy.

Why does CAC (Customer Acquisition Cost) matter for investors?

In financial metrics, CAC (Customer Acquisition Cost) is one of the building blocks investors use to compare opportunities and assess risk. Understanding it helps you read research notes, earnings reports, and market commentary without getting lost in jargon.

How is CAC (Customer Acquisition Cost) used in practice?

CAC payback period = CAC ÷ monthly gross profit per customer. Strong businesses recover CAC in 12 months or less.

Recent news mentioning CAC (Customer Acquisition Cost)

Ex-Parramatta Council CEO faces ICAC probe over alleged corrupt hiring

The Quick Take * ICAC has opened a public inquiry into former City of Parramatta Council CEO Gail Connolly over alleged hiring corruption * Allegations centre on subverting recruitment practices to place friends and allies in council job vacancies * No market or stock price movement data available; event is a public-sector governance/regulatory matter * ICAC proceedings are ongoing — findings, referrals, or recommendations expected as inquiry progresses * No direct Asia/global market impac

May 15, 2026

Related terms

LTV (Lifetime Value)

Total profit a customer generates over their relationship with a company.

Churn

Rate at which customers cancel or stop using a product.

ARR (Annual Recurring Revenue)

Annualized run-rate of subscription or recurring contract revenue.

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