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SaaS Metrics Library
CAC Ratio: Calculation, Benchmarks & Improvement Guide
The CAC ratio shows how many dollars of sales and marketing spend it takes to add one dollar of new ARR. Calculate the blended and new-customer versions with your own numbers and compare them with the 2026 medians.
CAC RATIO
New-customer CAC ratio: $1.63. The number of companies reporting this metric is not stated.
2026 benchmark · Aleph × Benchmarkit, 342-company study
This article will provide
- Calculation
- Benchmarks
- Improvement
The CAC ratio is sales and marketing spend in a period divided by the new annual recurring revenue (ARR) won in the same period. It expresses acquisition cost per dollar of new recurring revenue rather than per customer.
That makes it comparable across companies with very different price points. A customer acquisition cost of $9,000 means little without the contract size; a CAC ratio of $1.30 means the same thing at any price point: $1.30 spent for every $1 of new ARR.
Two versions are in common use:
- Blended CAC ratio: all sales and marketing spend ÷ all new ARR, including expansion from existing customers.
- New-customer CAC ratio (also called new-name or new-logo CAC ratio): the spend aimed at winning new customers ÷ new ARR from those customers only.
How is the CAC ratio calculated?
Blended CAC ratio = sales and marketing spend ÷ new ARR
New-customer CAC ratio = sales and marketing spend on new customers ÷ new ARR from new customers
Inputs:
- Sales and marketing spend: fully loaded, as for CAC: salaries, commission, paid media, agencies, tools and events. Use the same cost definition as your CAC.
- New ARR: ARR added in the period. For the blended ratio, new-customer ARR plus expansion ARR. For the new-customer ratio, new-customer ARR only.
- Period: usually a quarter or a trailing twelve months. Some companies use the prior quarter's spend to allow for the sales cycle; whichever choice you make, keep it the same.
Worked example
In a quarter, a company spends $1,500,000 on sales and marketing and adds $1,000,000 of new ARR: $750,000 from new customers and $250,000 from expansion. Of the spend, $1,350,000 is aimed at new customers.
Blended CAC ratio = $1,500,000 ÷ $1,000,000 = $1.50
New-customer CAC ratio = $1,350,000 ÷ $750,000 = $1.80
| Line | Amount |
|---|---|
| Sales and marketing spend | $1,500,000 |
| New ARR (new customers + expansion) | $1,000,000 |
| Blended CAC ratio | $1.50 |
| Spend aimed at new customers | $1,350,000 |
| New ARR from new customers | $750,000 |
| New-customer CAC ratio | $1.80 |
The new-customer ratio is higher because expansion ARR is cheaper to win and lowers the blended figure.
Try it with your numbers
$
$
Spend divided by new ARR: $1,500,000 ÷ $1,000,000
$1.50of spend per $1 of new ARR
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Download the 2026 SaaS Benchmark Report We’ve emailed you a copy as well.How is the CAC ratio used by SaaS companies?
- Budgeting sales and marketing. The ratio turns an ARR target into a spending plan. At $1.50, a $4M new-ARR target implies about $6M of sales and marketing spend.
- Comparing with peers. Because it is expressed per dollar of ARR, it can be compared across companies with different contract sizes, which raw CAC cannot.
- Separating acquisition from expansion. Tracking the blended and new-customer ratios side by side shows how much of the company's efficiency comes from existing customers.
- Reading payback. The CAC ratio, adjusted for gross margin, is closely related to CAC payback: a lower ratio means spend is recovered faster.
The CAC ratio is roughly the inverse of the SaaS magic number, which divides new revenue by sales and marketing spend. A high magic number and a low CAC ratio describe the same efficiency, so most boards choose one and track it consistently. The sales efficiency entry compares these measures.
What is a good result?
Lower is better: each dollar of new ARR costs less to win. The 2026 medians below are the clearest reference point. Read the ratio against your growth rate and retention, because a company that keeps customers for many years can justify a higher ratio than one with high churn.
What are the CAC ratio benchmarks?
| Measure | 2026 median |
|---|---|
| Blended CAC ratio | $1.30 of sales and marketing spend per $1 of new ARR (down 7% year on year) |
| New-customer (new-name) CAC ratio | $1.63 (improved about 19% year on year) |
Source: 2026 Aleph × Benchmarkit SaaS & AI Performance Benchmarks, published June 1, 2026, full-year 2025 actuals from 342 B2B SaaS and AI-native companies; see Aleph's page on CAC payback and the CAC ratio. The number of companies reporting the CAC ratio is not stated (198 reported CAC payback), and no quartiles are published for it. Checked October 26, 2026.
The gap between the two medians shows the effect of expansion revenue: winning a customer who has never bought before costs about 25% more per dollar of ARR than the blended figure suggests.
Measure acquisition efficiency
Know what each dollar of new ARR costs to win.
ScaleXP calculates ARR and 30+ other SaaS metrics from your accounting data, your CRM data or both, on one definition every period.
Segment metrics by Xero tracking codes, QuickBooks Classes, HubSpot properties or Stripe metadata.
Automate Your SaaS MetricsExample CAC ratio view
- Accounting: Xero, QuickBooks, Zoho Books
- CRM (with Xero or QuickBooks Online): HubSpot, Salesforce, Pipedrive
Sales and marketing spend
$1,500,000
Fully loaded spend for the quarter: salaries, commission, paid media, agencies, tools and events.
Illustrative example figures, not your live data.
What to do with your CAC ratio
- Use the same cost base as CAC. Fully loaded spend in both, so the CAC ratio, CAC and CAC payback reconcile.
- Report both versions. A blended ratio that improves while the new-customer ratio worsens means expansion is masking weaker acquisition.
- Choose a lag and keep it. If your sales cycle is about a quarter, compare this quarter's new ARR with last quarter's spend, and apply that rule every period.
- Break it down by segment and channel. Enterprise and self-serve customers have very different ratios; a single blended figure hides both.
- Work on conversion and expansion. Better lead quality, shorter sales cycles and retention-led expansion lower the ratio more reliably than cutting spend, which reduces cost and new ARR together.
How ScaleXP supports the CAC ratio
ScaleXP calculates ARR and 30+ other SaaS metrics from your accounting data, your CRM data or both. Metrics can be segmented by Xero tracking codes, QuickBooks Classes, HubSpot properties or Stripe metadata, so new ARR can be split by product line or region before it is set against the sales and marketing spend for the same period.
Metric definitions can be edited, so the line between new-customer ARR and expansion stays where your board expects it, and the blended and new-customer ratios stay comparable from quarter to quarter.
Frequently asked questions
What is a good CAC ratio for SaaS?
The 2026 Aleph × Benchmarkit benchmarks put the median blended CAC ratio at $1.30 of sales and marketing spend per $1 of new ARR, and the median for new customers only at $1.63, based on full-year 2025 data. Below the median means acquisition is more efficient than the typical company in that study. Judge your figure alongside retention: long customer lifetimes can justify a higher ratio.
What is the difference between CAC and the CAC ratio?
Customer acquisition cost is spend divided by the number of new customers, so it is a dollar amount per customer. The CAC ratio is spend divided by new ARR, so it is a cost per dollar of recurring revenue. CAC depends heavily on price point and cannot be compared easily between companies. The CAC ratio removes that effect, which is why boards and benchmark studies tend to use it for comparisons.
Should expansion revenue be included in the CAC ratio?
Include it in the blended CAC ratio and exclude it from the new-customer ratio, and report both. Expansion ARR is usually cheaper to win than new-customer ARR, so including it lowers the ratio. In the 2026 Aleph × Benchmarkit data, the blended median is $1.30 and the new-customer median is $1.63. Reporting only the blended figure can hide a decline in new-customer acquisition efficiency.
How is the CAC ratio related to the magic number?
They are close to inverses of each other. The magic number divides new revenue by sales and marketing spend, while the CAC ratio divides spend by new ARR. A magic number above 1 broadly corresponds to a CAC ratio below $1, although exact definitions differ, for example in whether revenue is annualized or spend is lagged. Choose one as your primary efficiency measure and use the same definition every period.
Can ScaleXP split new ARR by segment for the CAC ratio?
Yes. ScaleXP calculates ARR and 30+ other SaaS metrics from your accounting data, your CRM data or both, and metrics can be segmented by Xero tracking codes, QuickBooks Classes, HubSpot properties or Stripe metadata. That lets finance set new ARR for each product line or region against the sales and marketing spend recorded for it in the same period, using cost definitions that stay the same every quarter.
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