What is a good CAC payback period for SaaS in 2025?

High Alpha's 2025 survey reported a median CAC payback of 5 months for companies under $1M ARR and 8 months at $1-5M ARR. Medians rose to 14 months at $5-20M, 20 months at $20-50M and 17 months above $50M.

Do SaaS companies with AI grow faster?

The 2025 report found that companies with AI deeply incorporated into their products grew twice as fast as those with AI as a supporting feature, across all ARR bands. The gap was widest at $1-5M ARR, at 70% faster growth.

Which go-to-market channel did SaaS companies use most in 2025?

Traditional direct sales was used by 39% of respondents, with 35% median growth and 90% median gross revenue retention. Sales-assist was used by 21% and channel partnerships by 20%, while self-service, at 12%, trailed on growth and retention.

Why did gross margins fall for early-stage SaaS companies in 2025?

Median gross margin was down 7% for companies under $1M ARR and 4% for those at $1-5M ARR, while larger companies held near 80%. The report linked the gap to AI and infrastructure costs that smaller companies cannot yet absorb at scale.

High Alpha 2025 SaaS Benchmarks Report: growth, retention and AI by revenue band

In two minutes

SaaS companies with artificial intelligence (AI) built deeply into the product grew twice as fast as peers that used AI as a supporting feature, across all annual recurring revenue (ARR) bands.
That gap was widest at $1-5M ARR, where deep AI was linked to 70% faster growth.
Median customer acquisition cost (CAC) payback rose with scale, from 5 months under $1M ARR to 20 months at $20-50M ARR.
Traditional direct sales was used by 39% of respondents, with 35% median growth and 90% median gross revenue retention, while self-service (12% of respondents) showed 32% growth and 87% retention.
Median gross margin fell 7% for companies under $1M ARR and 4% at $1-5M ARR, which the report attributed to AI and infrastructure costs.
Only 11% of companies described AI's efficiency impact as transformative, though nearly all reported some improvement.

Key numbers

2x: growth of companies with AI deep in the product vs. AI as a supporting feature, 2025, all ARR bands (section "Embedding AI Deeply in Product Drives Outsized Growth").
70%: faster growth from deep AI in the $1-5M ARR cohort, 2025 (section "Embedding AI Deeply in Product Drives Outsized Growth").
5 months: median CAC payback, companies under $1M ARR, Q2 2025 (quartile range 2-8) (section "Financial & Operating Metrics by ARR for All Respondents").
14 months: median CAC payback, companies at $5-20M ARR, Q2 2025 (quartile range 8-22) (section "Financial & Operating Metrics by ARR for All Respondents").
50%: median year-over-year ARR growth, $1-5M ARR companies, Q2 2025 vs. Q2 2024 (quartile range 24-100%) (section "Financial & Operating Metrics by ARR for All Respondents").
104%: median net revenue retention, $1-5M ARR companies, Q2 2025 (quartile range 91-110%) (section "Financial & Operating Metrics by ARR for All Respondents").
down 7%: change in median gross margin for companies under $1M ARR, 2025 vs. 2024 (section "Smaller SaaS Companies See Gross Margin Pressure").
64: number of IPOs (initial public offerings) in Q3 2025, with $15.0bn in proceeds (section "IPO Window Reopening").

What to do with it

Put your CAC payback next to your ARR band's median and quartile range: 5 months under $1M, 8 at $1-5M, 14 at $5-20M, 20 at $20-50M.
If you run a self-service motion, test a sales-assist step after product use, since sales-assist showed 34% median growth and 88% retention against self-service's 32% and 87%.
If you are under $5M ARR and shipping AI features, track gross margin monthly, because medians fell 7% under $1M and 4% at $1-5M.
Check your net revenue retention against the 100% to 104% medians reported for bands under $50M ARR before setting expansion targets.
Use the report's distinction between AI as core and AI as a supporting feature to describe your own product honestly in positioning and fundraising material.

Read the full document if

you want the full quartile ranges for burn, research and development spend, and Rule of 40 by ARR band.
you are choosing a pricing model and want the report's data on consumption and outcome-based pricing.
you are planning headcount and want the ARR per employee figures by stage.

What it relies on

The document: 2025 SaaS Benchmarks Report by High Alpha. The report is High Alpha's ninth annual survey of founders, CEOs and SaaS leaders, run with 40+ venture and platform partners. Company metrics are self-reported as of the end of Q2 2025, with growth measured against Q2 2024, and results are shown as medians and quartile ranges by ARR band. The report's web page lists 800+ survey respondents, the majority from the US (69%) and Europe (17%).