What is revenue growth rate?
Revenue growth rate is how much your revenue changed over a period, as a percentage. It is the most basic measure of momentum, and the one every other growth metric leans on.
The number means nothing without its period. 15% growth is excellent in a month and slow in a year, so always state the window.
The growth rate formula.
Period over period: growth rate = (current period minus prior period) divided by the prior period, times 100. Over several years, use CAGR, the compound annual growth rate, which smooths multi-year growth into one annual figure.
CAGR = ((ending value divided by starting value) to the power of one over the number of years) minus 1. It answers what steady annual rate would take you from start to end.
A worked example.
Revenue went from 1 million dollars last quarter to 1.2 million this quarter. Growth rate is 200,000 divided by 1,000,000, which is 20%.
What is a good growth rate?
It depends entirely on stage and period, so there is no single benchmark. Early-stage SaaS often grows double digits month over month; later-stage companies measure annual growth and pair it with profitability through the Rule of 40. The honest read is against your own plan and stage, not a public number.
Growth rate is a percentage; the dollars behind it are net new ARR. A high rate on a small base and a modest rate on a large base can add the same ARR.
How to grow faster.
Add more new revenue, expand existing customers, or lose less to churn. The percentage rises when the dollars added outpace the base.
A compounding acquisition channel raises the growth rate without raising spend in step. Organic search builds pipeline that grows month over month. See how we grow B2B SaaS revenue.