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Rule of 40 Calculator

Add revenue growth rate and profit margin to get your Rule of 40 score, with a pass/fail at 40.

Rule of 40 Score = Revenue Growth Rate % + Profit Margin %. A score at or above 40 indicates a healthy SaaS business.

Revenue Growth Rate (%)

Year-over-year or period-over-period. Negative if shrinking.

Profit Margin (%)

Use EBITDA margin or free cash flow margin. Negative if unprofitable.

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How it works

Enter revenue growth rate %

Enter profit margin %

The sum is your Rule of 40 score with a verdict

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