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Note: Market data updated as of {{app.last_updated_at}}.
Each company's bubble size is proportional to their multiple of Enterprise Value / Annualized Quarter-End Revenue.
Y-axis is most recent reported quarter-end EBITDA margin as of above date.
X-axis is most recent reported quarter-end revenue as of above date versus prior year comparative quarter.
"Quadrants" are defined based on (1) meeting Rule of 40 and (2) having revenue growth > 30%.
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The Rule of 40 Index helps companies balance their growth versus profitability, by allowing them to compare themselves against similar companies in their industry.

Enter your company's information to compare your results to the public SaaS companies in our index. See how you stack up and download or share your results.

Your company's financial data will NOT be stored or shared.


What is the Rule of 40?

The Rule of 40 is a popular “back of the envelope” calculation used to assess the value of public SaaS companies based on the trade-off between growth and profitability.

Companies will meet the Rule of 40 if year-over-year revenue growth rate plus profitability margin equals 40%.

How is the Rule of 40 used?

Data on public companies suggests that the greater the sum of a company’s growth plus profitability, the greater the revenue multiple assigned to that business.

This implies that the answer to growth or profitability is not one or the other but rather the impact of one on the other.

Index Constituents

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Notes & Disclaimers

The information provided within the Rule of 40 Index is for general informational and discussion purposes only. Under no circumstances should any information provided within the Rule of 40 Index be used or considered as investment or other financial advice of any kind by Volition Capital. Volition Capital makes no warranties, express or implied, or representations regarding any such information or the data presented herein. Volition Capital and/or its affiliates, employees, and clients may purchase, sell or hold securities of issuers presented in the Rule of 40 Index at any time, including prior to or following an issuer's addition or removal from the Rule of 40 Index.

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