Magic Number Calculator

About this calculator

The SaaS magic number measures how efficiently a subscription business turns sales and marketing spend into new revenue: Magic Number = (Current Quarter Revenue - Prior Quarter Revenue) x 4, divided by Prior Quarter Sales and Marketing Spend. Annualizing the quarter-over-quarter revenue gain puts it on the same yearly basis as the spend it’s being compared to.

Venture investors and SaaS operators popularized this metric — originally attributed to Scale Venture Partners — as a quick health check on go-to-market efficiency: a magic number above 0.75 generally signals it’s worth investing more aggressively in sales and marketing, between 0.5 and 0.75 suggests efficiency needs work before scaling spend, and below 0.5 is often read as a sign to fix retention or conversion rather than pour in more budget. It’s a standard slide in SaaS board decks and fundraising materials alongside CAC payback and net revenue retention.

This calculator takes your current and prior quarter revenue along with prior-quarter sales and marketing spend and returns the magic number.