Calculate your Rule of 40 score to measure SaaS health
Monitor growth, profitability, and Rule of 40 with Refgrow's analytics dashboard.
Start Free TrialThe Rule of 40 states that a SaaS company's growth rate plus profit margin should equal or exceed 40%. It's a key metric investors use to evaluate SaaS health.
The rule balances growth and profitability - companies can have high growth with low margins, or slower growth with high margins, as long as the sum is ≥40%.
Companies meeting or exceeding the Rule of 40 typically command higher valuations and are more attractive to investors and acquirers.
Use Rule of 40 to guide strategic decisions - whether to prioritize growth investments or focus on profitability improvements.
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