Metric
Magic Number
Also known as: SaaS Magic Number
Sales-efficiency metric: Net New ARR in a quarter divided by sales+marketing spend in the previous quarter.
Magic Number measures sales and marketing efficiency. Formula: (Net New ARR Q) / (Sales + Marketing spend Q-1). A Magic Number of 1.0 means €1 of new ARR for every €1 of sales+marketing investment — that's good.
2026 benchmarks: > 0.75 acceptable, > 1.0 efficient, > 1.5 rare and excellent. Below 0.5 is a red flag for VCs.