How to measure Magic Number

Annualized net-new ARR generated for each dollar of the prior quarter's sales & marketing spend.

Magic Number = (Net New ARR × 4) ÷ Prior-Quarter S&M Spend

Why it matters: The classic go-to-market efficiency gauge: above 0.75 signals it's safe to invest more in S&M; below 0.5 means fix the funnel before pouring in more spend.

1 tools that produce Magic Number

Side-by-side: how each tool produces this number, what to read before adopting, and where to find the official docs. Saasly does not integrate with these tools — this is a reference so you can pick the right one for your stack.

ToolCategoryHow it produces Magic NumberPricing
StripeBilling platformComputed (SQL / export)Pay-as-you-go (2.

Per-tool: what to know before you plug it in

Stripe

Computed (SQL / export)

Billing platform

Subscription billing platform with built-in dashboards and SQL analytics (Sigma).

Before you adopt: Stripe provides the ARR component (via MRR × 12); the prior-quarter S&M spend comes entirely from outside Stripe. Pull net-new ARR by quarter in Sigma and pair it with the previous quarter's marketing/sales total — never the same quarter.
Pricing: Pay-as-you-go (2.9% + $0.30 per charge). Sigma analytics: free up to 1K charges/mo, then $0.02/charge.
Official docs for Magic Number Stripe home

Already have your numbers? Run the math.

The Saasly Calculator computes Magic Number (and 15 other SaaS metrics) from manual input — useful when you've pulled the underlying numbers out of one of the tools above and want a quick sanity check with industry benchmark percentiles.

Open the calculator

Other metrics

How to measure Customer Lifetime Value
The total gross profit a single customer is expected to generate over their entire relationship with you.
How to measure Customer Acquisition Cost
The fully-loaded cost of acquiring one paying customer in a given period.
How to measure Monthly Recurring Revenue
The normalized monthly value of every active subscription, regardless of billing period.
How to measure Customer Churn Rate
The percentage of customers who cancel in a given period. Counts logos, not dollars.
How to measure Net Revenue Retention
How much revenue a cohort of existing customers generates compared to where they started — including expansion, contraction, and churn.
How to measure CAC Payback Period
The number of months of gross profit from a customer required to recover the cost of acquiring them.
How to measure SaaS Quick Ratio
The ratio of revenue gained (new + expansion) to revenue lost (churn + contraction) in a period.
How to measure Gross Margin
The percentage of revenue left after the direct cost of delivering the service (hosting, support, payment fees, third-party APIs).
How to measure Trial-to-Paid Conversion
The percentage of users who start a trial and become paying customers.
How to measure Net Promoter Score
A survey-based score from the 0–10 'how likely are you to recommend us?' question, taking promoters (9–10) minus detractors (0–6).
How to measure DAU/MAU Ratio
The share of monthly active users who use the product on a given day — the standard 'stickiness' measure.