What is the Rule of 40 for SaaS?

The Rule of 40 states that a healthy SaaS company's growth rate plus profit margin should equal at least 40%. For example, a company growing 25% YoY with a 20% profit margin passes the Rule of 40 (45 total). It remains the most widely used framework for balancing growth and profitability, especially for companies above $10M ARR.

What is the difference between NRR and GRR?

NRR (Net Revenue Retention) includes expansion revenue from existing customers, while GRR (Gross Revenue Retention) only measures revenue retained before expansion. Median NRR for bootstrapped B2B SaaS at $3M–$20M ARR is 103%, with top performers reaching 117.9%. NRR above 100% means existing customers are generating more revenue even before new customer acquisition.

How much revenue does the average SaaS customer generate?

Median revenue per customer for self-serve B2B SaaS under $1M ARR is $49/month. For sales-led B2B SaaS at $1M–$10M ARR, median revenue per customer jumps to $1,280/month — a 26x difference reflecting the shift from low-ACV self-serve to higher-ACV sales-led models.

SaaS MRR Growth Rate Benchmarks: YoY Growth, NRR & Rule of 40 (2025 Data for 2026 Planning)

Quick Take:

Profitable SaaS grows 12% YoY vs. 38% for unprofitable VC-backed — the growth-efficiency tradeoff in one number. Bootstrapped companies often accept lower growth in exchange for profitability; 85% of bootstrapped SaaS in the SaaS Capital survey are at breakeven or profitable vs. 46% of equity-backed.
Median YoY growth = 20% for $1M–$10M ARR (High Alpha, 800+ sample); SaaS Capital reports 25% overall median (1,000+ sample), bootstrapped 23% vs equity-backed 25%.
NRR above 130% correlates with 46% growth — 83% higher than the overall median. Expansion revenue is a growth lever, not just retention.
Rule of 40 (growth + profit margin ≥ 40%) is a widely used evaluation framework, not a hard compliance standard — some healthy bootstrapped SaaS don't meet it.
Bootstrapped under $1M ARR: 6.5% MoM median. Median values are reference benchmarks, not targets. Free to cite with attribution.

Free to cite with attribution. Link back to this page as your source. Each data point below includes the original research institution, publication year, and a direct link to the source report.

What is a good MRR growth rate for SaaS in 2026?

For B2B SaaS with $1M–$10M ARR, the median YoY MRR growth rate is 20% (High Alpha 2025, 800+ sample), with top quartile reaching 42%. SaaS Capital's 2025 survey of 1,000+ private SaaS reports an overall median of 25%, with bootstrapped at 23% and equity-backed at 25% — bootstrapped companies nearly match VC-backed growth while 85% are profitable vs. 46%. The Rule of 40 (growth + profit margin ≥ 40%) is a widely used evaluation framework, not a hard standard — some healthy bootstrapped SaaS prioritize profitability over the 40 threshold. Median values are reference benchmarks, not company performance targets.

MRR (Monthly Recurring Revenue) growth is the primary top-line metric for SaaS companies. Growth rates vary dramatically by ARR stage, funding status, and business model. Profitable SaaS grows at a median 12% YoY, while unprofitable VC-backed companies grow at 38% YoY — reflecting the fundamental tradeoff between growth and efficiency. Companies with NRR above 130% grow at 46% median (SaaS Capital), showing that expansion from existing customers is one of the most powerful growth levers available.

MRR and ARR Growth Benchmarks

Note: Rows marked "Primary" are directly published in source reports. "Aggregated" figures combine data from multiple sources. "Estimate" rows could not be independently verified against a public full report.

Scroll horizontally to view full source notes on mobile.

Metric	ARR Segment	Business Model	Median Value	Source	Year	Note
YoY ARR Growth	All Private B2B SaaS	Mixed	20% median	Aleph × Benchmarkit 2026 SaaS & AI Benchmarks, 342 cos	2026	Primary source — CY-2025 actuals
YoY Growth (Overall)	All Private B2B SaaS	Mixed	25% median	SaaS Capital 2025 Growth Benchmarks, 1000+ cos	2025	Primary source — 14th annual survey
YoY Growth (Bootstrapped)	All Stages	Bootstrapped B2B	23% median	SaaS Capital 2025 Growth Benchmarks	2025	Primary source — 85% profitable
YoY Growth (Equity-backed)	All Stages	VC-backed B2B	25% median	SaaS Capital 2025 Growth Benchmarks	2025	Primary source — 46% profitable
YoY Growth (NRR>130%)	All Stages	High-retention SaaS	46% median	SaaS Capital 2025 Growth Benchmarks	2025	Primary source — 83% above overall median
YoY MRR Growth	<$1M ARR	Mixed B2B	28% YoY	High Alpha SaaS Benchmarks 2025, 800+	2025	Primary source
YoY MRR Growth	$1M–$10M ARR	Mixed B2B	20% median; 42% top quartile	High Alpha SaaS Benchmarks 2025, 800+	2025	Primary source
YoY MRR Growth	$10M–$50M ARR	Mixed B2B	11% YoY	ChartMogul SaaS Research	2025	Aggregated from survey dataset
MoM MRR Growth	<$1M ARR	Bootstrapped B2B	6.5% monthly	ChartMogul SaaS Research	2025	Primary source — under $1M only
ARR Growth (Profitable)	All Stages	Profitable SaaS	12% YoY	Bessemer State of AI 2025	2025	Primary source
ARR Growth (Unprofitable)	All Stages	VC-backed Growth	38% YoY	Bessemer State of AI 2025	2025	Primary source
Rule of 40 (Median)	All Private B2B SaaS	Mixed	25% (growth+margin)	Aleph × Benchmarkit 2026 SaaS & AI Benchmarks	2026	Primary source — up from 15% in CY-24
NRR	$3M–$20M ARR	Bootstrapped B2B	103%	High Alpha SaaS Benchmarks 2025	2025	Primary source
NRR (90th Percentile)	$3M–$20M ARR	Bootstrapped B2B	117.9%	High Alpha SaaS Benchmarks 2025	2025	Primary source
Median Revenue/Customer	<$1M ARR	Self-serve B2B	$49/month	ChartMogul SaaS Research	2025	Primary source
Median Revenue/Customer	$1M–$10M ARR	Sales-led B2B	$1,280/month	KeyBanc (press release only) Full report not publicly available	2025	Estimate — not independently verifiable

Key insight: The growth gap between profitable and unprofitable SaaS (12% vs. 38% YoY) reflects the fundamental tradeoff between growth and efficiency. But the SaaS Capital 2025 data adds nuance: bootstrapped companies grow at 23% vs. equity-backed 25% — nearly matching VC growth while 85% are profitable. The real growth multiplier is retention: companies with NRR above 130% grow at 46% median, 83% faster than the overall median. Rule of 40 median improved to 25% (Aleph × Benchmarkit, from 15% in CY-24), but it remains a framework, not a requirement.

Benchmark Your Metrics

Use our free calculators to measure your company's performance against these industry benchmarks:

MRR Growth Calculator

Track your monthly recurring revenue growth and benchmark against 20% YoY median for growth-stage SaaS.

SaaS Revenue Calculator

Project MRR, ARR, and revenue growth based on your current metrics and churn rate.

Profit Margin Calculator

Calculate your margins and check if you pass the Rule of 40 (growth + margin ≥ 40%).

More SaaS Benchmarks

Explore other verified SaaS metric benchmarks, each with source-linked data and free-to-cite URLs:

Churn Rate Benchmarks

Net dollar churn, customer churn, and GRR by ARR segment and business model.

LTV:CAC & CAC Payback

LTV:CAC ratios, CAC payback periods, and median CAC by ARR stage.

MRR Growth Benchmarks

YoY and MoM MRR growth, NRR, and revenue per customer by stage.

Free Trial Conversion

Trial-to-paid, freemium conversion, and sales cycle benchmarks.

S&M Spend Benchmarks

Marketing and sales spend as % of ARR by funding status and GTM model.

ROAS & Expansion

Paid ad ROAS, expansion revenue share, and upsell/cross-sell rates.

GRR vs NRR

Gross vs Net Revenue Retention: why expansion masks churn, by GTM and ARR.

CAC Payback

Median 16 months, PLG 10 months, enterprise 18-24. Expansion CAC $0.80.

Rule of 40

Growth + profit margin framework. Median 25%, bootstrapped vs VC-backed.

Magic Number

Median 1.37 (N=132). Above 1.0 = scale, below 0.5 = brake.

← View all 54 benchmarks in the master hub

Methodology & Data Sources

Data sources:

Aleph × Benchmarkit 2026 SaaS & AI Performance Benchmarks — Published June 2026, 342 B2B SaaS & AI-native companies. CY-2025 full-year actuals. Primary source for median growth 20%, Rule of 40 25%.
SaaS Capital 2025 Growth Benchmarks — 1,000+ private B2B SaaS, 14th annual survey. Overall growth 25% median; bootstrapped 23% vs equity-backed 25%; NRR>130% companies grow 46%; 85% bootstrapped profitable vs 46% equity-backed.
High Alpha 2025 SaaS Benchmarks Report — 800+ private B2B SaaS, Q2 2025 data. Formerly OpenView Partners (acquired 2024). ARR-segmented MRR growth, NRR by bootstrapped segment.
ChartMogul SaaS Research — 2,500+ SaaS businesses. Bootstrapped MoM growth, revenue per customer.
Bessemer State of AI 2025 — Profitable vs unprofitable SaaS growth comparison.

Metric definitions: MRR = Monthly Recurring Revenue. YoY growth = (Current MRR / Prior Year MRR) − 1. MoM growth = (Current MRR / Prior Month MRR) − 1. NRR = Net Revenue Retention, including expansion from existing customers. Rule of 40 = YoY growth rate + profit margin (FCF or EBITDA margin); a widely used evaluation framework, not a compliance standard. Revenue per customer = MRR / active customers (median across sample).

Why growth rates differ across reports: Aleph × Benchmarkit (20%) and SaaS Capital (25%) report different medians because their samples differ: Aleph skews toward later-stage and AI-native companies, while SaaS Capital includes more bootstrapped and early-stage businesses. High Alpha's 20% for $1M–$10M matches Aleph's overall figure. Use the source whose sample matches your stage and funding model.

Limitations: (1) Samples skew VC-backed B2B SaaS — bootstrapped subset sizes not always disclosed. (2) AI-native SaaS may show different growth patterns due to rapid product iteration and inference cost structures. (3) Median values are reference benchmarks, not company performance targets — bootstrapped companies often prioritize profitability over VC-level growth. (4) Rule of 40 is a framework, not a hard requirement. (5) This is a secondary compilation, not original survey research. View the full collection of 54 SaaS benchmarks in the master hub, the churn deep-dive, or the LTV:CAC benchmarks.

Get the Full Original Reports + Founder-Friendly Cheat Sheet

The benchmarks above are compiled from Aleph × Benchmarkit (342 cos), High Alpha (800+), SaaS Capital (1,000+), ChartMogul, and Bessemer reports. The full source PDFs contain segment-level breakdowns by ARR band, GTM motion, and pricing model that we've summarized here.

What you get: (1) Links to official full report PDFs, (2) our 1-page "SaaS Benchmarks for Bootstrapped Founders" cheat sheet, (3) our monthly newsletter with benchmark updates and AI tool reviews.

We respect your inbox. Unsubscribe anytime. We do not host or redistribute original copyrighted PDFs — official reports are delivered via publishers' websites.

Frequently Asked Questions

Is 20% YoY growth a target I should hit?

20% is the median for $1M–$10M ARR VC-backed B2B SaaS — it's a reference point, not a target. Bootstrapped companies in the SaaS Capital survey grow at 23% median while 85% are profitable, showing that growth and profitability aren't mutually exclusive. For bootstrapped SaaS, a 15–25% growth rate with healthy margins is often better than 30%+ growth burning cash. The right target depends on your funding model, cash position, and market opportunity.

Why do different reports give different growth medians (20% vs 25%)?

Sample composition. Aleph × Benchmarkit reports 20% (342 companies, skews later-stage and AI-native). SaaS Capital reports 25% (1,000+ companies, includes more bootstrapped and early-stage). High Alpha reports 20% for the $1M–$10M segment specifically. None is "wrong" — they measure different populations. Use the report whose sample most closely matches your business stage and funding type.

Is the Rule of 40 a hard requirement for SaaS?

No. The Rule of 40 (growth + margin ≥ 40) is a widely used evaluation framework, especially for companies above $10M ARR, but it's not a compliance standard. Some healthy bootstrapped SaaS prioritize profitability and may sit below 40 while still generating strong cash flow. The median Rule of 40 score in the Aleph × Benchmarkit 2026 survey is 25% (improved from 15% in CY-24), meaning most surveyed companies don't hit 40. It's a diagnostic tool, not a pass/fail test.

How does NRR above 130% drive 46% growth?

Companies with NRR above 130% generate so much expansion revenue from existing customers that a large portion of growth comes without new customer acquisition. SaaS Capital's 2025 data shows these companies grow at 46% median — 83% faster than the overall 25% median. This is why retention and expansion are often more powerful growth levers than top-of-funnel acquisition: expanding existing accounts has lower CAC ($0.80 expansion vs $1.63 new name) and higher predictability.

What is a good MoM growth rate for early-stage bootstrapped SaaS?

For bootstrapped SaaS under $1M ARR, the ChartMogul median is 6.5% monthly. But this varies widely — 3–5% MoM with strong margins is healthy for a profitable bootstrapper, while 10%+ MoM may indicate rapid product-market fit. Note that 6.5% MoM compounds to ~112% YoY, which is much higher than the 23% bootstrapped YoY median because the 6.5% figure applies specifically to the under-$1M segment where growth rates are naturally highest.

SaaS MRR Growth Rate Benchmarks 2026