Sales efficiency of S&M spend. The SaaS Magic Number Calculator takes revenue this quarter, revenue last quarter, sales and marketing spend last quarter and returns saas magic number plus reading, annualized revenue added. Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
Startup metrics are about the efficiency of growth: how much it costs to win and keep customers, how fast recurring revenue compounds, and how long the cash lasts. Investors read these numbers before they read the pitch. Use the worked example below to check the maths against your own figures.
How the SaaS Magic Number Calculator works
The magic number measures how much annualised revenue each unit of sales and marketing spend produced one quarter later. Above 0.75 says the go-to-market machine works and deserves more fuel.
Worked example
With the example values (revenue this quarter of $300,000, revenue last quarter of $250,000, sales and marketing spend last quarter of $150,000), the saas magic number is 1.33; reading Efficient: worth investing more in sales and marketing, annualized revenue added $200,000.00. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
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Frequently Asked Questions
How is saas magic number calculated?
magic number = (this quarter's revenue − last quarter's) × 4 ÷ last quarter's sales and marketing spend.
Which figures do I need?
Revenue this quarter, revenue last quarter, sales and marketing spend last quarter. Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
What do investors consider healthy?
Common benchmarks: LTV:CAC above 3, CAC payback under 12–18 months, net revenue retention above 100%, monthly churn under 2% for SMB and under 1% for enterprise, and at least 12–18 months of runway.
