Career & Growth · Free tool

SaaS Magic Number Calculator

S&M efficiency: (net new ARR × 4) / S&M spend. >1.0 means push more spend; <0.5 means slow down.

Updated April 2026

Net new ARR this quarter ($)S&M spend this quarter ($)

Magic Number

4.80

(Net new ARR × 4) / S&M spend

Efficiency tier

Great — push more spend

Each sales & marketing dollar returns strong ARR. Consider accelerating hiring and paid channels.

If this quarter continues for a year

Projected annual ARR added: $2,400,000
Projected annual S&M spend: $2,000,000
ARR added per $1 of S&M: $1.20

Benchmark rule

> 1.0 — Pour fuel on the fire
0.75 – 1.0 — Keep investing, tune the funnel
0.5 – 0.75 — Pause scaling, fix conversion
< 0.5 — Slow spend and re-examine ICP

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What it does

The VC-favorite S&M efficiency metric. Above 1.0 you’re under-investing; below 0.5 you’re wasting. This gives you the number.

Runs entirely in your browser — no upload, no account, no watermark. For more tools in this category see the full tools index.

Embed this tool on your siteShow snippet

Paste this snippet into any page. Loads on-demand (lazy), no tracking scripts, and sized to most dashboards. Replace the height to fit your layout.

<iframe src="https://freetoolarena.com/embed/saas-magic-number-calculator" width="100%" height="720" frameborder="0" loading="lazy" title="SaaS Magic Number Calculator" style="border:1px solid #e2e8f0;border-radius:12px;max-width:720px;"></iframe>

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How to use it

Enter new ARR this quarter.
Enter S&M spend.
Read Magic Number.