What is the median Rule of 40 for public SaaS companies?

The median Rule of 40 for public SaaS companies tracked on SaaSDB is approximately 33. Only 61 of public SaaS companies score above 40. Data is from SEC EDGAR filings, updated daily.

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Rule of 40 Benchmarks

Name: Rule of 40 Benchmarks — Public SaaS Companies (2026)
Creator: SaaSDB
License: https://saasdb.app/terms/

Public SaaS Companies — 172 companies tracked

Median Score32.8

Scoring 40+61

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The Rule of 40 is the primary efficiency benchmark for public SaaS companies: revenue growth rate + FCF margin must equal or exceed 40. Companies above 40 are considered capital-efficient; below 40 signals a growth-profitability tradeoff that investors increasingly scrutinize at scale. All 172 companies are ranked below using the most recently reported quarterly data.

Ranked Rule of 40 Data

#	Company	Ticker	Sector	Rule of 40	Rev Growth	FCF Margin
1	GH Gloo Holdings, Inc.	GLOO	Vertical SaaS	210.2	298.5%	-88.3%
2	CI CoreWeave, Inc.	CRWV	Vertical SaaS	177.3	277.6%	-100.3%
3	II INTUIT INC.	INTU	Vertical SaaS	162.0	157.9%	4.0%
4	RI Reddit, Inc.	RDDT	Vertical SaaS	130.3	96.3%	33.9%
5	PT Palantir Technologies Inc.	PLTR	Data & Analytics	126.9	100.8%	26.2%
6	AD Applied Digital Corp.	APLD	Vertical SaaS	118.6	171.1%	-52.5%
7	EG Exzeo Group, Inc.	XZO	Vertical SaaS	112.3	67.7%	44.7%
8	VS Veeva Systems Inc.	VEEV	Vertical SaaS	107.7	24.2%	83.5%
9	HH Hinge Health, Inc.	HNGE	Vertical SaaS	101.1	76.3%	24.8%
10	BI Block, Inc.	SQ	Vertical SaaS	99.5	44.8%	54.8%
11	FA FIRST ADVANTAGE CORP	FA	Vertical SaaS	98.6	89.9%	8.7%
12	II INNODATA INC	INOD	Vertical SaaS	94.0	77.9%	16.1%
13	FI Figma, Inc.	FIG	Vertical SaaS	83.9	63.9%	20.1%
14	DI Duolingo, Inc.	DUOL	Vertical SaaS	81.8	49.0%	32.8%
15	VS VARONIS SYSTEMS INC	VRNS	Vertical SaaS	75.4	25.5%	49.9%
16	RC Roblox Corp	RBLX	Vertical SaaS	72.8	48.6%	24.2%
17	CA Clearwater Analytics Holdings, Inc.	CWAN	Data & Analytics	69.4	62.7%	6.7%
18	CS Clear Secure, Inc.	YOU	Vertical SaaS	68.5	27.1%	41.4%
19	DI Datadog, Inc.	DDOG	DevTools & Observability	66.8	43.1%	23.7%
20	BS BENTLEY SYSTEMS INC	BSY	Vertical SaaS	65.8	16.4%	49.4%
21	SI ServiceNow, Inc.	NOW	IT Service Management	65.3	30.9%	34.4%
22	DI Dynatrace, Inc.	DT	DevTools & Observability	65.0	20.2%	44.9%
23	QI QUALYS, INC.	QLYS	Vertical SaaS	64.1	13.9%	50.2%
24	NI N-able, Inc.	NABL	Vertical SaaS	61.9	54.4%	7.5%
25	PS PROGRESS SOFTWARE CORP /MA	PRGS	Vertical SaaS	59.5	31.2%	28.3%
26	CH CrowdStrike Holdings, Inc.	CRWD	Vertical SaaS	59.0	33.0%	25.9%
27	AI Autodesk, Inc.	ADSK	Vertical SaaS	58.5	23.9%	34.7%
28	GI GitLab Inc.	GTLB	DevTools & Observability	55.3	26.3%	29.0%
29	ZG Zeta Global Holdings Corp.	ZETA	Vertical SaaS	55.2	47.6%	7.6%
30	SI Shopify Inc.	SHOP	Vertical SaaS	55.0	38.3%	16.8%
31	GD Gen Digital Inc.	GENVR	Vertical SaaS	54.5	28.4%	26.1%
32	GD Gen Digital Inc.	GEN	Vertical SaaS	54.5	28.4%	26.1%
33	BI Box, Inc.	BOX	Cloud Storage	54.5	12.1%	42.3%
34	SI Snowflake Inc.	SNOW	Data & Analytics	54.0	32.1%	21.9%
35	RI Rubrik, Inc.	RBRK	Vertical SaaS	53.9	49.5%	4.4%
36	CI Cloudflare, Inc.	NET	Vertical SaaS	53.2	44.4%	8.8%
37	SI SYNOPSYS INC	SNPS	Vertical SaaS	52.6	45.3%	7.4%
38	LI Life360, Inc.	LIF	Vertical SaaS	51.5	45.9%	5.7%
39	NI nCino, Inc.	NCNO	Vertical SaaS	49.9	14.9%	35.0%
40	JL JFrog Ltd	FROG	Vertical SaaS	49.7	35.8%	13.9%
41	PI Paychex, Inc.	PAYX	HR Tech	49.6	14.9%	34.8%
42	PI PTC INC.	PTC	Vertical SaaS	49.4	17.6%	31.7%
43	WI WORKIVA INC	WK	Vertical SaaS	48.7	27.5%	21.1%
44	AI Adobe Inc.	ADBE	Marketing Tech	48.3	15.7%	32.6%
45	PI Pegasystems Inc.	PEGA	Low-Code / No-Code	47.9	8.0%	39.9%
46	KI Klaviyo, Inc.	KVYO	Vertical SaaS	47.7	42.1%	5.6%
47	RV Red Violet, Inc.	RDVT	Vertical SaaS	47.2	29.6%	17.7%
48	VA Verisk Analytics, Inc.	VRSK	Data & Analytics	47.1	6.8%	40.4%
49	TT The Trade Desk, Inc.	TTD	Marketing Tech	46.6	16.1%	30.6%
50	NI Nutanix, Inc.	NTNX	Vertical SaaS	45.8	27.3%	18.4%
51	ZC Zoom Communications, Inc.	ZM	Communications	45.3	6.4%	38.9%
52	PG Porch Group, Inc.	PRCH	Vertical SaaS	45.2	47.9%	-2.7%
53	OI Okta, Inc.	OKTA	Security	44.9	16.5%	28.4%
54	CI CarGurus, Inc.	CARG	Vertical SaaS	44.2	21.2%	23.0%
55	AI AvePoint, Inc.	AVPT	Vertical SaaS	43.9	37.2%	6.7%
56	HI HubSpot, Inc.	HUBS	Marketing Tech	43.8	28.0%	15.8%
57	FI Freshworks Inc.	FRSH	Vertical SaaS	41.7	23.0%	18.8%
58	SA SOUNDHOUND AI, INC.	SOUNW	Vertical SaaS	40.8	99.5%	-58.7%
59	SA SOUNDHOUND AI, INC.	SOUN	Vertical SaaS	40.8	99.5%	-58.7%
60	AI AppFolio, Inc.	APPF	Vertical SaaS	40.6	29.5%	11.2%
61	CC Consensus Cloud Solutions, Inc.	CCSI	Vertical SaaS	40.1	1.4%	38.7%
62	SI SentinelOne, Inc.	S	Security	39.8	30.2%	9.6%
63	MI MongoDB, Inc.	MDB	Data & Analytics	39.7	22.4%	17.3%
64	NI Navan, Inc.	NAVN	Vertical SaaS	39.4	34.8%	4.5%
65	TH Tenable Holdings, Inc.	TENB	Vertical SaaS	39.2	14.5%	24.7%
66	IV i3 Verticals, Inc.	IIIV	Vertical SaaS	38.2	12.5%	25.7%
67	ZT ZoomInfo Technologies Inc.	ZI	Sales Intelligence	38.0	2.5%	35.4%
68	DI DOCUSIGN, INC.	DOCU	Vertical SaaS	37.9	7.9%	30.0%
69	PT Procore Technologies, Inc.	PCOR	Vertical SaaS	37.8	21.3%	16.5%
70	SI Salesforce, Inc.	CRM	CRM & Sales	37.7	13.4%	24.3%
71	CD CADENCE DESIGN SYSTEMS INC	CDNS	Vertical SaaS	37.7	14.9%	22.8%
72	EN Elastic N.V.	ESTC	DevTools & Observability	37.5	19.1%	18.4%
73	NR New Relic, Inc.	NEWR	DevTools & Observability	37.4	21.2%	16.2%
74	TI Toast, Inc.	TOST	Vertical SaaS	37.3	35.5%	1.8%
75	WI Workday, Inc.	WDAY	HR Tech	37.2	18.1%	19.2%
76	SI ServiceTitan, Inc.	TTAN	Vertical SaaS	37.2	26.4%	10.8%
77	SC SPS Commerce, Inc.	SPSC	Vertical SaaS	37.1	20.3%	16.8%
78	BI Braze, Inc.	BRZE	Marketing Tech	37.1	25.4%	11.7%
79	YI Yext, Inc.	YEXT	Vertical SaaS	36.2	5.1%	31.1%
80	PS Paycom Software, Inc.	PAYC	HR Tech	36.1	10.4%	25.7%
81	VT Via Transportation, Inc.	VIA	Vertical SaaS	35.4	42.1%	-6.8%
82	CI Coursera, Inc.	COUR	Vertical SaaS	34.4	26.0%	8.4%
83	AC Appian Corporation	APPN	Low-Code / No-Code	34.1	23.7%	10.5%
84	UI UiPath, Inc.	PATH	Vertical SaaS	34.1	8.3%	25.8%
85	TI TaskUs, Inc.	TASK	Vertical SaaS	33.3	21.4%	11.9%
86	CS COMMVAULT SYSTEMS INC	CVLT	Vertical SaaS	32.8	19.1%	13.7%
87	OC ORACLE CORP	ORCL	Vertical SaaS	32.8	8.6%	24.2%
—	Median Benchmark	—	All Sectors	32.8	—	—
88	LI LEGALZOOM.COM, INC.	LZ	Vertical SaaS	32.8	16.6%	16.2%
89	QH Q2 Holdings, Inc.	QTWO	Vertical SaaS	32.5	19.6%	12.9%
90	MC Microsoft Corporation	MSFT	Cloud Infrastructure	32.4	10.7%	21.7%
91	BI BLACKLINE, INC.	BL	Vertical SaaS	32.1	10.4%	21.7%
92	SI Sprinklr, Inc.	CXM	Marketing Tech	32.0	7.5%	24.5%
93	NI NERDWALLET, INC.	NRDS	Vertical SaaS	31.7	19.5%	12.3%
94	MA MANHATTAN ASSOCIATES INC	MANH	Vertical SaaS	31.7	8.2%	23.5%
95	DH DigitalOcean Holdings, Inc.	DOCN	Cloud Infrastructure	31.1	26.5%	4.6%
96	SH SEMrush Holdings, Inc.	SEMR	Vertical SaaS	30.8	17.7%	13.0%
97	PI PagerDuty, Inc.	PD	Vertical SaaS	30.6	5.5%	25.1%
98	EI EVERTEC, Inc.	EVTC	Vertical SaaS	30.5	16.0%	14.5%
99	AT Alkami Technology, Inc.	ALKT	Fintech	30.3	35.6%	-5.3%
100	TI Twilio Inc.	TWLO	Communications	29.6	21.9%	7.7%
101	NI Netskope Inc	NTSK	Vertical SaaS	28.9	26.7%	2.2%
102	SS Sprout Social, Inc.	SPT	Marketing Tech	28.9	16.5%	12.4%
103	WC Weave Communications, Inc.	WEAV	Communications	28.8	19.9%	8.9%
104	SI SailPoint, Inc.	SAIL	Vertical SaaS	28.8	22.7%	6.1%
105	MI Marqeta, Inc.	MQ	Vertical SaaS	28.1	29.3%	-1.2%
106	PH Paylocity Holding Corporation	PCTY	HR Tech	27.3	12.6%	14.7%
107	TC TERADATA CORP /DE/	TDC	Vertical SaaS	27.1	-4.1%	31.2%
108	TT TYLER TECHNOLOGIES INC	TYL	Vertical SaaS	26.7	14.6%	12.0%
109	ZI Zuora, Inc.	ZUO	Fintech	26.3	14.1%	12.2%
110	CI Confluent, Inc.	CFLT	Data & Analytics	26.3	21.1%	5.2%
111	FI Five9, Inc.	FIVN	Communications	26.2	13.9%	12.3%
112	AW ACI WORLDWIDE, INC.	ACIW	Vertical SaaS	26.1	9.1%	17.0%
113	RI RingCentral, Inc.	RNG	Communications	25.9	6.7%	19.2%
114	IL IBEX Ltd	IBEX	Vertical SaaS	25.4	22.0%	3.4%
115	CI CCC Intelligent Solutions Holdings Inc.	CCC	Vertical SaaS	25.3	12.7%	12.6%
116	DI Dropbox, Inc.	DBX	Cloud Storage	25.2	-1.1%	26.2%
117	FI Fastly, Inc.	FSLY	Vertical SaaS	25.0	22.0%	3.0%
118	ST SS&C Technologies Holdings Inc	SSNC	Vertical SaaS	24.7	9.6%	15.1%
119	GD GRID DYNAMICS HOLDINGS, INC.	GDYN	Vertical SaaS	24.0	19.1%	4.9%
120	BH Bill.com Holdings, Inc.	BILL	Fintech	23.8	7.7%	16.1%
121	TI Trimble Inc.	TRMB	Vertical SaaS	23.1	0.1%	23.0%
122	BI Backblaze, Inc.	BLZE	Vertical SaaS	22.6	21.3%	1.3%
123	AH Alarm.com Holdings, Inc.	ALRM	Vertical SaaS	22.4	12.1%	10.3%
124	VI Vertex, Inc.	VERX	Vertical SaaS	21.2	16.6%	4.7%
125	CI CareCloud, Inc.	CCLD	Vertical SaaS	19.3	9.7%	9.6%
126	CI CareCloud, Inc.	CCLDO	Vertical SaaS	19.3	9.7%	9.6%
127	EI EverCommerce Inc.	EVCM	Vertical SaaS	19.1	5.8%	13.3%
128	EC EGAIN Corp	EGAN	Vertical SaaS	19.0	-3.0%	22.0%
129	II Intapp, Inc.	INTA	Vertical SaaS	18.9	10.0%	8.9%
130	AD AUTOMATIC DATA PROCESSING INC	ADP	Vertical SaaS	18.5	7.1%	11.4%
131	CI Cars.com Inc.	CARS	Vertical SaaS	18.1	0.2%	17.9%
132	OI OOMA INC	OOMA	Vertical SaaS	17.8	9.5%	8.3%
133	IE Inspired Entertainment, Inc.	INSE	Vertical SaaS	17.4	0.0%	17.4%
134	GS Guidewire Software, Inc.	GWRE	Vertical SaaS	16.6	38.5%	-21.8%
135	DH Definitive Healthcare Corp.	DH	Vertical SaaS	16.4	-8.0%	24.4%
136	CI Certara, Inc.	CERT	Vertical SaaS	16.3	6.3%	10.1%
137	CI Commerce.com, Inc.	CMRC	Vertical SaaS	15.7	2.7%	13.0%
138	JH Jamf Holding Corp.	JAMF	IT Service Management	15.6	22.5%	-6.9%
139	AI Amplitude, Inc.	AMPL	Data & Analytics	15.2	22.4%	-7.2%
140	VS Verint Systems Inc.	VRNT	Security	15.1	-6.6%	21.6%
141	8I 8X8 INC /DE/	EGHT	Vertical SaaS	13.3	3.6%	9.7%
142	RI Rapid7, Inc.	RPD	Vertical SaaS	12.8	1.0%	11.7%
143	AI Asana, Inc.	ASAN	Project Management	12.2	9.2%	3.1%
144	LH LiveRamp Holdings, Inc.	RAMP	Vertical SaaS	12.1	10.1%	2.0%
145	GH GoodRx Holdings, Inc.	GDRX	Vertical SaaS	12.0	0.1%	11.9%
146	US Unity Software Inc.	U	Vertical SaaS	10.5	8.4%	2.0%
147	BI BLACKBAUD INC	BLKB	Vertical SaaS	10.2	-1.7%	11.9%
148	UI UPWORK, INC	UPWK	Vertical SaaS	9.7	1.9%	7.8%
149	MG Momentive Global Inc.	MNTV	Data & Analytics	9.2	7.6%	1.6%
150	SI Shutterstock, Inc.	SSTK	Vertical SaaS	8.6	1.4%	7.2%
151	TT TAKE TWO INTERACTIVE SOFTWARE INC	TTWO	Vertical SaaS	7.6	15.6%	-7.9%
152	MN Model N, Inc.	MODN	Fintech	5.8	16.3%	-10.5%
153	CI Cerence Inc.	CRNC	Vertical SaaS	5.7	-6.2%	11.9%
154	DT DXC Technology Co	DXC	Vertical SaaS	3.3	-2.8%	6.1%
155	EA ELECTRONIC ARTS INC.	EA	Vertical SaaS	2.5	-0.9%	3.4%
156	DI Domo, Inc.	DOMO	Data & Analytics	0.8	0.5%	0.3%
157	CS CSG SYSTEMS INTERNATIONAL INC	CSGS	Vertical SaaS	-0.5	1.4%	-1.9%
158	BI Bandwidth Inc.	BAND	Communications	-0.6	0.9%	-1.4%
159	DG DigitalBridge Group, Inc.	DBRG	Cloud Infrastructure	-4.2	-4.2%	0.0%
160	KI KALTURA INC	KLTR	Vertical SaaS	-5.1	0.6%	-5.7%
161	SG Silvaco Group, Inc.	SVCO	Vertical SaaS	-10.8	11.1%	-21.9%
162	SI Skillz Inc.	SKLZ	Vertical SaaS	-12.5	21.3%	-33.9%
163	IH Instructure Holdings, Inc.	INST	Vertical SaaS	-14.4	33.4%	-47.8%
164	CD CS Disco, Inc.	LAW	Vertical SaaS	-15.4	13.3%	-28.7%
165	PH PowerSchool Holdings, Inc.	PWSC	Vertical SaaS	-21.0	16.2%	-37.1%
166	XI Xperi Inc.	XPER	Vertical SaaS	-41.2	-9.6%	-31.6%
167	3S 3D SYSTEMS CORP	DDD	Vertical SaaS	-44.1	-14.5%	-29.6%
168	BH BigBear.ai Holdings, Inc.	BBAI-WT	Vertical SaaS	-51.2	-13.6%	-37.6%
169	BH BigBear.ai Holdings, Inc.	BBAI	Vertical SaaS	-51.2	-13.6%	-37.6%
170	CI C3.ai, Inc.	AI	Vertical SaaS	-53.3	-23.6%	-29.7%
171	WI WEX Inc.	WEX	Fintech	-53.8	2.4%	-56.1%
172	VI Veritone, Inc.	VERI	Vertical SaaS	-59.9	-2.6%	-57.3%

What is the Rule of 40?

The Rule of 40 was popularized by venture capitalist Brad Feld as a quick health check for SaaS companies. The idea: add your annual revenue growth rate (%) to your profit margin (%). If the sum is 40 or above, the company is healthy — whether it prioritizes growth or profitability.

Formula: Rule of 40 = Revenue Growth Rate (%) + FCF Margin (%)

Interpretation: A company growing 60% YoY with −20% FCF margin scores 40. A company growing 20% with 20% FCF margin also scores 40. Both are considered balanced. Companies scoring below 40 may be burning cash without commensurate growth.

Related guides & definitions

Rule of 40: full definition & formula →Understanding ARR growth & efficiency →DevTools & Observability — highest avg Rule of 40 sector →

Frequently Asked Questions

What is a good Rule of 40 score for a SaaS company?

A Rule of 40 score above 40 is considered the benchmark for a healthy SaaS company — meaning revenue growth rate plus free cash flow margin equals at least 40%. Best-in-class public SaaS companies like Palantir and Veeva have posted scores above 60. Scores below 20 signal that a company is not generating enough growth or profitability to justify its cost structure.

How is Rule of 40 calculated?

Rule of 40 = Revenue Growth Rate (YoY %) + Free Cash Flow Margin (%). Some investors use EBITDA margin or operating margin instead of FCF margin. On SaaSDB, we use the FCF margin definition: (operating cash flow − capex) / revenue × 100.

Does Rule of 40 work for early-stage companies?

The Rule of 40 is most relevant for companies with at least $50M ARR. Early-stage companies may have very high growth rates that naturally satisfy the rule regardless of profitability. For mature SaaS businesses (>$500M ARR), both components matter equally — growth alone is no longer sufficient.

Author•

Ara Housepian

Founder & Lead SaaS Analyst, Araho Digital

Ara is the founder of Araho Digital and SaaSDB. He has spent over a decade in software development, SaaS operating metrics modeling, and investment data analysis. Ara holds a degree in Computer Science and focuses on building financial tooling and data pipelines that make institutional-grade SaaS benchmarking accessible to growth operators.

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Data sourced from SEC EDGAR filings · Updated daily · As of 2026-06-15

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