Metrics
Magic Number
Quick definition
Sales efficiency metric — new ARR per dollar of S&M spend.
Magic Number = (Quarterly ARR growth × 4) / Prior-quarter S&M spend. Above 1.0 is strong, above 0.75 is healthy, below 0.5 means your GTM isn't returning efficient growth.
Related metrics terms
ARR (Annual Recurring Revenue)
Annualized value of your subscription revenue at a point in time.
MRR (Monthly Recurring Revenue)
Monthly equivalent of ARR, useful for month-over-month tracking.
Net Revenue Retention (NRR)
Revenue from your existing customer base 12 months later, including expansion and churn.
Gross Revenue Retention (GRR)
NRR without upsell — what you keep before expansion.
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