Rule of Forty: Key figure for growth and profitability

October 16, 2024

The Rule of Forty is an important metric for SaaS companies that combines revenue growth and profitability to assess the health of a company. It states that the sum of percentage revenue growth and EBITDA margin should be at least 40 % to be considered sustainably successful. This rule helps investors and managers to find a balance between rapid growth and financial stability.