What Is the Net Magic Number?
The net magic number is a SaaS efficiency metric that compares new ARR generated in a period to the net new sales and marketing spend that drove it. Most teams track it in a spreadsheet export that mixes revenue figures with expense line items in different units and different period labels.
See the exact formula, which export columns to pull, and how to apply a spend lag so the metric actually reflects causal efficiency.
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Upload your spreadsheet.xlsx .xls .csv — free to try, no accountWhat this export contains
| period |
| new_arr |
| churned_arr |
| net_new_arr |
| s_and_m_spend |
| headcount_sales |
| cac |
| payback_months |
| expansion_arr |
| magic_number_score |
What usually goes wrong with it
Revenue and expense data live in different files
New ARR lives in the CRM export while S&M spend lives in the finance export — the two files use different period labels and must be manually joined before the metric can be calculated.
DataMimi Datamimi joins CRM and finance exports on period labels automatically, even when date formats differ between the two source files.
Net new ARR definition varies by team
Many teams calculate net_new_arr as new bookings only, excluding expansion_arr and churned_arr, which produces an inflated numerator and a misleading efficiency score.
DataMimi It separates new bookings, expansion_arr, and churned_arr into labeled columns so the net_new_arr numerator reflects the correct definition.
No lag applied between spend and revenue
S&M spend in Q1 typically drives ARR that closes in Q2 or Q3 — calculating the metric with same-quarter figures significantly understates the true efficiency of that cohort.
DataMimi It applies a configurable lag offset to the spend column so the metric compares Q1 spend to Q2 or Q3 ARR without manual row shifting.
Common questions
What is the net magic number?
The net magic number is a SaaS efficiency metric calculated as net new ARR divided by prior-period net new sales and marketing spend, measuring how efficiently growth dollars translate into recurring revenue.
What is a good net magic number score?
A score above 0.75 is generally considered efficient; above 1.0 means the business generates more than a dollar of ARR for every dollar of net new S&M spend.
How is it calculated in a spreadsheet?
The formula is net_new_arr divided by prior-quarter s_and_m_spend; use a one-quarter lag on the spend column so revenue and spend are causally matched.
How does it differ from the standard magic number?
The standard magic number uses gross new ARR as the numerator; the net version subtracts churned ARR to reflect true net growth efficiency, which is more conservative and accurate.
How much does Datamimi cost?
Datamimi offers a Free plan at $0/month (40 credits, no credit card required), Lite at $9/month (400 credits), Starter at $24/month (1,500 credits, up to 3 simultaneous files), Pro at $59/month (5,000 credits with rollover), and Team at $199/month (20,000 credits, 5 users).
Try it with your own file
DataMimi reads the file you actually have — merged cells, headers below row one, totals pasted at the bottom — and shows which rows and columns every number came from.
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