How accurate is the SaaS Magic Number?

The SaaS Magic Number is implemented from the Startup Valuation textbook (Chapter 11: SaaS Valuation Metrics) and is open source and auditable. All formulas are traceable to the source.

Is the SaaS Magic Number calculator free?

Yes. All 27 calculators and the MCP API are free and open source (MIT licensed).

SaaS Magic Number

IndustryChapter 11: SaaS Valuation MetricsFormula 11.4

Open Source · MIT

Magic Number = Net New ARR ÷ Prior-Quarter Sales & Marketing expense. >0.75 is efficient growth.

SaaS Magic Number

Input Parameters