SaaS Magic Number Calculator

Calculate the SaaS Magic Number (4 × Net New ARR / S&M Spend). Benchmark sales efficiency, compare segments, derive implied CAC, and model sales capacity.

$
$
Magic Number
—
Status —
Annualized Net New ARR —
Extended More scenarios, charts & detailed breakdown ▾
$
$
Magic Number
—
Status —
S&M Efficiency ($ARR per $1 spent) —
Professional Full parameters & maximum detail ▾
$
$
%
$

Sales Efficiency

Magic Number —
Gross Magic Number (w/ GM) —
Status —

Sales Capacity

ARR per Quota-Carrying Rep —
Pipeline Coverage Ratio —
Implied CAC (from S&M/deals) —

How to Use This Calculator

  1. Enter Net New ARR this quarter and S&M spend last quarter.
  2. Magic Number and status appear instantly.
  3. Use By Segment tab to compare SMB, mid-market, and enterprise efficiency.
  4. Switch to Professional for gross magic number, ARR per rep, and pipeline coverage ratio.

Formula

Magic Number = (4 × Net New ARR) / S&M Spend (prior quarter)

≥1.0 = Healthy | 0.75–1.0 = OK | <0.75 = Weak

Example

Net New ARR: $500K, S&M last Q: $600K → Magic Number = (4 × $500K) / $600K = 3.33 — Healthy.

Frequently Asked Questions

  • The Magic Number measures sales efficiency: how much ARR you generate for every dollar of sales & marketing spent. Formula: (4 × Net New ARR this quarter) / S&M spend last quarter. Above 1.0 means you generate $1 of ARR for every $1 of S&M — which is healthy.
  • Net new ARR is quarterly, but the Magic Number denominates in annual terms. Multiplying by 4 annualizes the quarterly ARR so it is comparable to annual S&M spend.
  • >1.0 is healthy — accelerate S&M spending. 0.75–1.0 is OK — optimize before scaling. Below 0.75 is weak — improve unit economics before increasing spend.
  • Magic Number is a ratio (efficiency score). CAC is an absolute dollar figure (cost to acquire one customer). They are related: a higher Magic Number generally implies a lower CAC relative to LTV.
  • Pipeline coverage ratio = pipeline value / ARR target. A 3–4× ratio is considered healthy — meaning you have 3–4 times the ARR you need to close in active pipeline, accounting for win rates.

Related Calculators

💸 CAC Calculator ⚖️ Rule of 40 📊 ARR Calculator ⚖️ LTV:CAC Ratio
Sources & References (5) ▾
  1. Magic Number — Scale Venture Partners — Scale Venture Partners
  2. State of the Cloud — Bessemer — Bessemer Venture Partners
  3. OpenView SaaS Benchmarks Report — OpenView Partners
  4. SaaStr Magic Number Guide — SaaStr
  5. The Sales Acceleration Formula — Mark Roberge — Mark Roberge / HubSpot