Sales Forecasting

Net Magic Number

2026-05-31 8 min read

Net Magic Number is a variant of the Magic Number that uses Net New ARR (gross new + expansion − churn) rather than only gross new ARR. Formula: Net New ARR × 4 / Prior Period S&M Spend. The Net Magic Number better reflects true sales+marketing efficiency for established SaaS businesses with meaningful expansion and churn. Best-in-class Net Magic Number: ≥1.0. Bessemer prefers Net Magic Number for evaluating mature SaaS investments.

TL;DR

<strong>Net Magic Number</strong> is a variant of the Magic Number that uses Net New ARR (gross new + expansion − churn) rather than only gross new ARR. Formula: Net New ARR × 4 / Prior Period S&M Spend. The Net Magic Number better reflects true sales+marketing efficiency for established SaaS businesses with meaningful expansion and churn. Best-in-class Net Magic Number: ≥1.0. Bessemer prefers Net Magic Number for evaluating mature SaaS investments.

At a glance

Category: Sales Forecasting
Related: 5 terms

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Sources

Definitions and benchmarks reference primary sources from the Sales Forecasting pillar. Verified at publication.

1 State of Sales Forecasting — Gartner, 2025. View source .

2 AI Revenue Forecasting Accuracy Study — Forrester, 2025. View source .

3 Pipeline Coverage Benchmarks B2B SaaS — Pavilion, 2025. View source .

Fairview cites primary sources only — government data, academic research, industry benchmarks from named publishers, and official vendor documentation. See our editorial standards.

Net Magic Number

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