B2B SaaS Rule Of 40 Calculator
Instantly calculate the "Rule of 40" of your B2B SaaS:
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Rule Of 40:
40%
B2B SaaS "Rule of 40" Formula
Rule of 40 = Growth Rate (%) + Profit Margin (%)
The Rule of 40 is a guideline for software companies. It says that the combined total of a company's profit margin (in %) and growth rate (in %) should be at least 40%.
This helps measure if a company is doing well by making sure it grows fast without losing too much money.
This guideline is useful for both new startups and big companies alike, to make sure they're growing sustainably.
This helps measure if a company is doing well by making sure it grows fast without losing too much money.
This guideline is useful for both new startups and big companies alike, to make sure they're growing sustainably.
Rule of 40 B2B SaaS Over Time (2015-2024)
How do publicly traded SaaS stack up when it comes to the "Rule of 40"?
In the below chart, you see the median "Rule of 40" over the years.
Source: S&P Capital IQ