Break-Even Point for SaaS Business
MRR, customers, and CAC payback calculations made simple
SaaS Break-Even MRR Formula
Basic MRR Break-Even
Break-Even MRR = Monthly Fixed Costs ÷ Gross Margin %
Where Gross Margin % = (MRR − Variable Costs) ÷ MRR
With Churn
Break-Even MRR = Monthly Fixed Costs ÷ (1 − Variable Cost % − Churn %)
Break-Even Customers
Formula
Break-Even Customers = Monthly Fixed Costs ÷ (ARPU − Variable Cost per Customer)
Definitions
- ARPU = Average Revenue Per User (monthly)
- Variable Cost = hosting, support, payment fees
CAC Payback Break-Even
Formula
CAC Payback Months = CAC ÷ (ARPU − Variable Cost)
Rule of Thumb
Payback < 12 months for healthy SaaS.
Real SaaS Break-Even Examples
1. Starter SaaS
Fixed: $5,000/mo
ARPU: $29
Variable: $4
CAC: $87
MRR = 5,000 ÷ (29 − 4)/29 ≈ $5,814
Customers = 5,814 ÷ 29 ≈ 201
CAC Payback = 87 ÷ 25 ≈ 3.5 months
Customers = 5,814 ÷ 29 ≈ 201
CAC Payback = 87 ÷ 25 ≈ 3.5 months
2. Mid-Market SaaS
Fixed: $25,000/mo
ARPU: $199
Variable: $19
CAC: $1,200
MRR = 25,000 ÷ (199 − 19)/199 ≈ $27,778
Customers = 27,778 ÷ 199 ≈ 140
CAC Payback = 1,200 ÷ 180 ≈ 6.7 months
Customers = 27,778 ÷ 199 ≈ 140
CAC Payback = 1,200 ÷ 180 ≈ 6.7 months
3. Enterprise SaaS
Fixed: $80,000/mo
ARPU: $1,200
Variable: $100
CAC: $8,000
MRR = 80,000 ÷ (1,200 − 100)/1,200 ≈ $87,273
Customers = 87,273 ÷ 1,200 ≈ 73
CAC Payback = 8,000 ÷ 1,100 ≈ 7.3 months
Customers = 87,273 ÷ 1,200 ≈ 73
CAC Payback = 8,000 ÷ 1,100 ≈ 7.3 months
SaaS Break-Even Calculator
Break-Even MRR: $—
Break-Even Customers: —
Download the SaaS Break-Even Template
Excel & Google Sheets workbook with MRR, customer, and CAC payback tabs.
Download CSV Template