Tag: rule of 40

Rule of 40 SaaS: Only 15% Hit It in 2026

Vikas Thakur / Oct 22, 2026 / 9 min read

Only 15% of public SaaS companies cleared the Rule of 40 on EBITDA margin in May 2026, per Aventis Advisors' analysis of 55 listed firms. Switch the profit metric to free cash flow margin and the pass rate nearly triples to 46%. This report breaks down the Rule of 40 by profit definition, by quarter, and by what it is actually worth at exit.