Finance & Strategy
SaaS Magic Number
Sales efficiency: ARR added per dollar of S&M spend.
Calculate the Magic Number — net new ARR ÷ prior-quarter sales & marketing spend. Above 1.0 = invest more aggressively. Below 0.5 = pull back.
Inputs
Adjust to model your scenario
$4,800,000
$
$4,200,000
$
$600,000
$
Magic Number
1.00×
Annualized new ARR
$2,400,000
Net new ARR (qtr)
$600,000
Formula
Magic = (Net New ARR × 4) ÷ (Prior Q S&M Spend × 4)
Benchmarks
< 0.5Inefficient — pull back
0.5–0.75Acceptable — tighten
0.75–1.0Healthy — keep investing
> 1.0Elite — invest more
Related tools
Tools operators run alongside this one.
Need more than the math?
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