ConverterHub

Magic Number Payback Calculator

Enter current and prior ARR with S&M spend to get the magic number and payback.

How to use

  1. Enter your values in the fields above.
  2. Press Calculate to see your result instantly.
  3. Use the Share button to copy a link to your result.

About this calculator

The SaaS magic number, popularized by venture firms like Bessemer Venture Partners, measures sales and marketing efficiency by comparing the quarter-over-quarter growth in annualized recurring revenue against the prior quarter's S&M spend: (current ARR − prior ARR) × 4 ÷ prior quarter S&M spend. A magic number above roughly 0.75 is generally read as a signal to invest more aggressively in growth, while a lower number suggests spend isn't translating efficiently into new recurring revenue.

This calculator takes your current and prior quarter ARR along with S&M spend, and returns both the magic number and the implied CAC payback period in months — how long it takes new revenue to recoup the cost of acquiring it. SaaS finance and revenue operations teams, founders preparing board decks, and venture investors evaluating growth efficiency use these two numbers together as a quick gut-check on whether a company's go-to-market spend is actually working.

Was this helpful?

Comments (0)

  • Be the first to comment.

Popular calculators

Loan Calculator

Monthly payment, total interest and full amortization schedule.

Percentage Calculator

Percent change, percent of, and ratio calculations.

Discount Calculator

Calculate final price, savings, and discount amount.

BMI Calculator

Body mass index from height and weight (metric or imperial).

Age Calculator

Compute your exact age in years, months and days from a birth date.

Compound Interest Calculator

Calculate the final amount and interest earned with compounding.

All Calculators