Growth + Profitability · Updated June 2026
Rule of 40 Benchmarks
YoY revenue growth % + FCF margin % by ARR band and growth rate category. Where the best-performing public and private SaaS companies actually land.
Calculate your Rule of 40 score
YoY revenue growth % + FCF margin %. See where you land on the benchmark curve.
Your Rule of 40 score
Rule of 40 benchmarks by ARR band and growth category
| ARR Band | Growth Category | Median R40 Score | Top Quartile Score | Typical Growth % | Typical FCF Margin |
|---|---|---|---|---|---|
| Under $10M | Hyper-growth (>80%) | 52 | 78 | +110% | −58% |
| Under $10M | Fast growth (40–80%) | 28 | 48 | +55% | −27% |
| $10M–$50M | Hyper-growth (>80%) | 55 | 82 | +95% | −40% |
| $10M–$50M | Fast growth (40–80%) | 40 | 62 | +58% | −18% |
| $10M–$50M | Solid growth (20–40%) | 22 | 38 | +28% | −6% |
| $50M–$200M | Hyper-growth (>80%) | 58 | 88 | +85% | −27% |
| $50M–$200M | Fast growth (40–80%) | 45 | 68 | +52% | −7% |
| $50M–$200M | Solid growth (20–40%) | 32 | 50 | +28% | +4% |
| $50M–$200M | Mature growth (<20%) | 18 | 35 | +15% | +3% |
| $200M+ | Fast growth (40–80%) | 48 | 72 | +45% | +3% |
| $200M+ | Solid growth (20–40%) | 42 | 65 | +28% | +14% |
| $200M+ | Mature growth (<20%) | 30 | 50 | +14% | +16% |
Sources: Bessemer State of the Cloud 2024, McKinsey SaaS benchmarking 2024, BVP Nasdaq Emerging Cloud Index constituents (public company filings). Rule of 40 = YoY Revenue Growth % + FCF Margin %.
Reading Rule of 40 at different scales
Early-stage companies (under $10M ARR) should not be judged on Rule of 40 — burning capital to grow fast is expected and rational at this stage. The metric becomes meaningful at $10M–$50M ARR where growth curves are steepening and burn rates are under investor scrutiny. Public SaaS companies with Rule of 40 scores above 40 command significant valuation premiums. McKinsey research shows Rule of 40 companies trade at roughly 2× the revenue multiple of peers below 40.Related benchmarks