SaaS metrics · Go-to-market efficiency

SaaS Magic Number Calculator

Compare annualized quarter-over-quarter recurring revenue growth with the sales and marketing spend that produced it.

Quarterly inputs

CurrencyPrevious-quarter recurring revenueCurrent-quarter recurring revenuePrevious-quarter sales & marketing spendGross margin (%)Target Magic Number

Use recurring revenue and the preceding quarter's sales and marketing expense consistently.

Efficiency results

SaaS Magic Number—

Efficiency band—

Quarterly revenue increase—

Annualized revenue increase—

Gross-margin-adjusted score—

Estimated CAC payback—

Revenue needed for target—

Gap to target revenue—

Formula and interpretation

The standard quarterly formula is (current recurring revenue − previous recurring revenue) × 4 ÷ previous-quarter sales and marketing spend.

A higher score means more annualized recurring revenue growth per dollar of acquisition spend. This tool labels results below 0.5 as low, 0.5–0.75 as developing, 0.75–1.0 as solid and 1.0 or higher as efficient. Benchmarks vary by stage, margin and growth strategy.