SaaS Rule of 40 Calculator — Growth Health Scorer
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 — Growth Health Scorer
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).
Frequently Asked Questions
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