SaaStr

NOVEMBER 4, 2021

In simple terms, the “Rule of 40” states a healthy SaaS company’s a) revenue growth rate plus b) profit margin should exceed 40%. . In equation form, Revenue Growth % + Profit Margin % > 40%. The “Rule of 40” treats 1% of revenue growth as exactly equivalent to 1% of profit margin.

Drivers/motivators 125

Drivers/motivators Profit margin Non-Profits Inside sales 125

SaaStr

MAY 28, 2025

Monday Has Incredible Free Cash Flow Margins Monday.com has managed the impressive feat of maintaining strong growth while significantly improving profitability metrics. This operational discipline has transformed a business with -53% operating margins in FY-20 to one with 14% non-GAAP operating margins in FY-24 and Q1-25.

Non-Profits 70

Non-Profits Profit margin Cross-sell Represent 70

SaaStr

MARCH 7, 2023

Out of those companies, over 50% were significantly below the Rule of 40 (a company’s combined profit margin and growth rate should exceed 40%) and/or had less than two years of runway. Is Your GTM Strategy Poking Holes In The Ship GTM strategy has been one of the biggest areas of inefficiency over the last two years.

GTM 69

GTM Growth Profit margin Contract 69

Sales Hacker

JANUARY 13, 2021

Depending on the software, implementation, and go-to-market (GTM) strategy, considerable costs and internal resources could be needed for a successful deployment. Non-recurring engineering (NRE) costs can be built into the pricing structure or billed out separately as a one-time fee. And if yes, to what extent?

GTM 85

GTM Negotiate Profit margin Contract 85