Rule of 40 Calculator
Combine annual revenue growth and a selected profit margin for a SaaS score.
Example result
- Distance from 40
- 5 percentage points
Choose and disclose one margin definition (for example free cash flow or EBITDA). The score is a heuristic, not a valuation or universal target.
How to calculate it
Choose and disclose one margin definition (for example free cash flow or EBITDA). The score is a heuristic, not a valuation or universal target.
Worked example
This is an illustrative scenario, not a market benchmark. Select “Reset to example” to reproduce it in the calculator.
- Year-over-year revenue growth
- 30 %
- Chosen profit margin
- 15 %
Combined score: 45 percentage points
Rule of 40 FAQ
Can I compare different margin definitions?
No. A company using free cash flow and one using adjusted EBITDA may produce materially different scores.
What does this calculation leave out?
Choose and disclose one margin definition (for example free cash flow or EBITDA). The score is a heuristic, not a valuation or universal target.
Are my inputs saved or sent to a server?
Calculations run in your browser. We do not send your inputs or results to our server or analytics. A comparison stays in this tab until it is refreshed. A CSV is saved only when you choose to download it. See our privacy policy for ordinary hosting and optional analytics data.
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