SaaS Rule of 40 Benchmark
Compute your Rule of 40 score (growth + margin) against stage bands investors use.
Disclaimer: This tool is for general informational and estimation purposes only and is not professional financial, tax, accounting or legal advice. All figures are estimates — verify with a qualified professional before making decisions. Read the full disclaimer.
Pitching investors or tracking SaaS health? Calculate your Rule of 40 score and see how growth and margin trade off at your stage.
About SaaS Rule of 40 Benchmark
The Rule of 40 is the quickest single health check for a SaaS business: revenue growth rate plus profit margin should total at least 40%. This calculator computes your score and places it against the stage bands investors actually use.
How to use SaaS Rule of 40 Benchmark
- 1Enter your year-over-year revenue growth percentage.
- 2Enter your profit margin percentage (use a negative number if you're burning).
- 3Read your score and how it compares to the stage bands below.
Why use SaaS Rule of 40 Benchmark?
- ✓Instantly see whether your SaaS passes the Rule of 40.
- ✓Understand how growth and margin trade off at your stage.
- ✓Stage bands show what 'good' looks like for early vs mature companies.
- ✓Free, private and runs entirely in your browser.
Frequently asked questions
What is the Rule of 40?+
It states that a healthy SaaS company's year-over-year revenue growth percentage plus its profit margin percentage should sum to 40 or more.
Is the Rule of 40 always the right target?+
It's a useful heuristic, not a law. Very early companies are growth-weighted and may run below 40 on margin; mature ones are profit-weighted.
Is the Rule of 40 benchmark free to use?+
Yes. It is completely free, runs in your browser and needs no sign-up. Any data point you add stays on your device — nothing is uploaded.
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