SaaS Magic Number
Efficiency ratio of revenue growth to sales and marketing spend.
The Magic Number measures how efficient your revenue growth is relative to sales and marketing spend. Above 1.0 means invest more; under 0.5 means your go-to-market is broken. It is a public-SaaS metric popularized by Scale Venture Partners.
Formula
Magic Number = (Current quarter ARR - Previous quarter ARR) x 4 / Previous quarter S&M spend