Free Tool — No account needed
Rule of 40 Calculator
Calculate your Rule of 40 score — the SaaS benchmark that balances growth rate and profitability. Results update as you type.
Rule of 40 inputs
Can be YoY or MoM — use the same period for both inputs
Can be negative — growth-stage SaaS often is
📐
Enter your revenue growth rate and profit margin above to see your Rule of 40 score.
What the Rule of 40 tells you
⚖️
It balances the growth vs profitability trade-off
High growth with negative margins is fine — as long as the combined score clears 40. The Rule of 40 lets investors compare a 60%-growth/−15%-margin startup against a 25%-growth/20%-margin one on a single axis.
🏢
Most relevant above $10M ARR
Below $10M ARR, pure growth rate dominates investor conversations. As you scale, profitability efficiency becomes the primary signal. Public SaaS companies are routinely valued on Rule of 40 multiples in the current market.
📉
Contracting growth amplifies the margin requirement
If your growth rate is slowing from 80% to 30%, your margin needs to move from −40% to +10% just to maintain the same Rule of 40 score. Growth deceleration is only sustainable if accompanied by margin improvement.
Score benchmarks
60+
Best-in-classElite SaaS — top-decile growth + strong margins
40–60
Rule of 40Healthy — meets the benchmark, investable at scale
20–40
AcceptableBelow benchmark — requires growth acceleration or margin improvement
< 20
Needs improvementConcerning — underperforming on both growth and profitability
Frequently asked questions
Rule of 40 above 40?
You're in a strong position to grow. LaunchBuff's fortnightly tournament is a zero-cost acquisition channel — submit your product and reach the founders buying tools right now.
Submit your product