What is the Rule of 40? SaaS Growth Formula & Calculator 2025
Rule of 40 explained: formula (growth rate + profit margin ≥ 40%), calculator, and SaaS benchmarks. Learn why investors use Rule of 40 to evaluate SaaS health.
Rule of 40 is a critical SaaS metric. This comprehensive guide covers everything you need to know: definition, calculation methods, industry benchmarks, and optimization strategies.
What is Rule of 40?
How to Calculate Rule of 40
Rule of 40 Industry Benchmarks
How to Improve Rule of 40
Frequently Asked Questions
What is a good Rule of 40 for SaaS companies?
Good Rule of 40 varies by company stage and business model. Early-stage companies typically have different benchmarks than mature businesses.
How often should I track Rule of 40?
Track Rule of 40 monthly at minimum. High-growth companies often monitor Rule of 40 weekly or even daily for faster iteration.
How does QuantLedger calculate Rule of 40?
QuantLedger uses ML-powered analytics to automatically calculate Rule of 40 from your payment data, with 95% accuracy and no manual work.
Key Takeaways
Mastering Rule of 40 is essential for SaaS success. Use QuantLedger to automatically track Rule of 40 and get ML-powered insights to improve performance.
Track Rule of 40 Automatically
Get instant Rule of 40 analytics with QuantLedger
Related Articles
What is ACV? Annual Contract Value Formula & Calculator 2025
ACV (Annual Contract Value) explained: formula, calculator, and SaaS benchmarks. Learn to calculate ACV vs ARR and optimize contract value for B2B SaaS.
What is ARPU? Average Revenue Per User Formula & Calculator 2025
ARPU (Average Revenue Per User) explained: formula, calculator, and SaaS benchmarks. Learn to calculate and increase ARPU for subscription revenue growth.
What is ARR? Annual Recurring Revenue Formula & Calculator 2025
ARR (Annual Recurring Revenue) explained: formula, calculator, and 2025 benchmarks. Learn how to calculate ARR for SaaS and track year-over-year growth.