CAC = Total Sales & Marketing Spend / Number of New Customers Acquired
CAC is what a company spends to win one new customer.
What it is
Customer Acquisition Cost is the total cost of acquiring a new customer, found by dividing sales and marketing expenses over a period by the number of new customers won in that period. It typically includes ad spend, sales-team salaries and commissions, and marketing tooling. It is a non-GAAP operating metric, not a line on the financial statements.
Why it matters
CAC tells you how efficiently a company turns spending into customers, and it is the denominator behind the widely watched LTV/CAC ratio. Rising CAC can signal market saturation, weaker product-market fit, or more competition for the same buyers. It is most useful when paired with how long it takes to earn that cost back (the CAC payback period).
How it's calculated
Divide total sales and marketing spend over a period by the number of new customers acquired in the same period.
How Quintarthai uses it
Sales-and-marketing spend (the numerator behind CAC) is visible in the operating-expense detail on a company's Financials tab, useful for sanity-checking management's stated CAC.
Cross-border note. CAC is reported in the company's functional currency, so compare a Canadian SaaS issuer's CAD-based CAC and a US peer's USD-based CAC only after converting; neither GAAP nor IFRS prescribes how CAC is calculated.
FAQ
Should CAC include sales salaries or just ad spend?
A fully loaded CAC includes all sales and marketing costs: ad spend, sales salaries and commissions, and tooling. A blended CAC that counts only ad spend understates the true cost.
What is a good CAC?
There is no single number; CAC is only meaningful relative to what a customer is worth. The common benchmark is an LTV/CAC ratio of 3 or higher and a CAC payback period under 12 to 18 months.
Check your understanding
A company computes CAC using only its advertising spend, ignoring sales-team salaries and commissions. How does this affect the reported CAC?
A fully loaded CAC includes ad spend plus sales salaries, commissions, and tooling, so omitting salaries understates the real cost of winning a customer.