SaaS Rule of 40 Calculator — Score, Benchmarks & What-If Analysis
Calculate your Rule of 40 score by adding YoY revenue growth rate and EBITDA margin. See your tier (Elite / Healthy / Below Average), a visual gauge with the 40-point threshold, benchmark comparison against public SaaS companies, and a what-if table showing what growth or margin improvement is needed to reach 40, 50, or 60.
How to Use SaaS Rule of 40 Calculator
How to Use the SaaS Rule of 40 Calculator
Step 1: Select Your Profit Metric
Choose which profit metric to combine with revenue growth:
- EBITDA Margin — most common choice; earnings before interest, taxes, depreciation, and amortization divided by revenue
- FCF Margin — free cash flow margin; useful for capital-efficient businesses
- Net Income Margin — use when evaluating GAAP profitability
Step 2: Enter Your Inputs
- YoY Revenue Growth Rate — annual revenue growth percentage (e.g. 35 for 35%)
- Profit Metric — your EBITDA, FCF, or net income as a percentage of revenue. Can be negative for fast-growing companies still investing in growth.
Step 3: Read Your Score
The calculator adds the two inputs to produce your Rule of 40 score. The score is shown on a visual gauge with the 40-point threshold marked:
- ≥ 60 — Elite (top-quartile public SaaS)
- ≥ 40 — Healthy (passes the Rule of 40)
- ≥ 20 — Below Average
- < 20 — Underperforming
Step 4: Use the What-If Table
If your score is below 60, the what-if table shows two paths to reach each target score:
- Growth path: what revenue growth rate is needed if margin stays the same?
- Margin path: what margin is needed if growth stays the same?
Step 5: Check the Benchmark Comparison
Compare your score visually against public SaaS benchmarks: top-quartile public SaaS (~60), median public SaaS with >$100M ARR (~40), growth-stage median (~32), and early-stage (~25).
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