SaaS मैजिक नंबर कैलकुलेटर — सूत्र

How to Calculate the SaaS Magic Number

Formula

Magic Number = (Current Quarter ARR - Previous Quarter ARR) / Previous Quarter Sales & Marketing Spend

The magic number measures how efficiently sales and marketing dollars convert into new recurring revenue. A value above 0.75 suggests you should invest more in sales and marketing. Between 0.5 and 0.75 indicates decent efficiency. Below 0.5 means your go-to-market engine needs tuning before scaling further.

हल किया गया उदाहरण

ARR grew from $4.5M to $5M. Last quarter, the company spent $400,000 on sales and marketing.

  1. Net New ARR = $5,000,000 - $4,500,000 = $500,000
  2. Magic Number = $500,000 / $400,000 = 1.25
  3. Every dollar of S&M spend generated $1.25 in new ARR.