Above 1: invest more in S&M. Below 0.5: GTM is broken.
Magic Number = (Net New ARR × 4) ÷ Prior Quarter Sales & Marketing Spend
Whether sales-and-marketing spend pays back within a year. Above 1: invest more. Below 0.5: GTM model is broken.
If your Magic Number for SaaS B2B at growth stage ($1M–$10M ARR) sits above 1.2, you're in the top quartile — consider whether you're under-investing in growth.
Around the median (0.8) is normal performance. Below P25 (0.5) signals a real problem in growth or retention that should be addressed before scaling.
Higher is better for this metric — right of the bar is the top quartile. Computed in your browser; nothing is stored or sent.
These are directional benchmark bands, not audited statistics. Each value is a P25/P50/P75 band segmented by industry and ARR stage, compiled from public benchmark research and cross-checked against the primary datasets below. Row-level attribution: Skok 2024.
Published SaaS benchmarks vary widely by methodology (self-reported surveys vs. billing data, annual vs. monthly churn definitions, ACV mix). Treat any single number — ours included — as a starting point for comparison, not a target.
- ChartMogul Reports & Benchmarks — billing-system transaction data from 2,500+ SaaS businesses
- Benchmarkit Annual B2B SaaS Benchmarks — 1,600+ private B2B SaaS companies, survey-based
- SaaS Capital Annual Survey — 1,000+ respondents, incl. bootstrapped-specific benchmarks
- High Alpha SaaS Benchmarks (ex-OpenView) — 800+ respondents, the long-running annual survey
- KeyBanc / Sapphire Private SaaS Survey — 16th annual edition, banker-grade operating metrics
What's a good Magic Number for SaaS B2B at growth stage?
The median Magic Number for SaaS B2B at growth stage is 0.8. The 25th percentile sits at 0.5 and the 75th at 1.2.
How is Magic Number calculated?
Magic Number = (Net New ARR × 4) ÷ Prior Quarter Sales & Marketing Spend. Whether sales-and-marketing spend pays back within a year. Above 1: invest more. Below 0.5: GTM model is broken.
Where does this benchmark come from?
Sourced from Skok 2024. These are directional P25/P50/P75 bands compiled from public benchmark research and cross-checked against primary datasets (ChartMogul, Benchmarkit, SaaS Capital, High Alpha, KeyBanc/Sapphire). Above 1: invest more in S&M. Below 0.5: GTM is broken.