Free Rule of 40 Calculator
Calculate your SaaS Rule of 40 score (growth rate + profit margin). Free instant calculator with quartile benchmarks.
Quick answer
The Rule of 40 is a shorthand for balancing growth and profitability in SaaS. It adds a revenue growth rate to a profit or free-cash-flow margin using the same percentage scale.
Formula
Rule of 40 score = annual revenue growth % + profit margin %
Example
45% annual growth plus a −5% margin produces a Rule of 40 score of 40.
How to interpret it
It is more useful for growth-stage SaaS than very early companies, and the chosen profit metric should be stated explicitly.
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