How to use this Magic Number Calculator
Enter your current SaaS metrics, then review the result, secondary metrics, and benchmark interpretation. This calculator is designed for fast planning rather than formal accounting.
Formula
The important point is consistency. Use the same revenue definition, time period, and customer definition every time so the metric remains comparable month to month.
Magic Number benchmark
Above 1.0 is strong, 0.75 to 1.0 is good, 0.5 to 0.75 is weak, and below 0.5 suggests inefficient sales and marketing spend.
FAQ
What does this calculator measure?
Calculate the SaaS Magic Number to evaluate sales efficiency from ARR growth and sales and marketing spend.
What is the formula?
Magic Number = Net New ARR ÷ Sales & Marketing Spend
How should I use this result?
Use it as a quick operating metric, then compare it with cohort trends, pricing changes, cash flow, retention, and acquisition channel quality.
Is this calculator exact accounting?
No. It is a planning calculator. Use consistent definitions from your finance reports when making board, investor, or fundraising decisions.