KPISales

Revenue Growth Rate

Period-over-period percentage increase in sales revenue

What is Revenue Growth Rate?

Revenue growth rate is the percentage change in revenue from one period to the next. It shows how fast a business is growing.

It is one of the most watched measures of business performance, used by leaders, investors and lenders.

How this KPI is measured

Function
Sales
Sub-function
Revenue Management
Industry
All Industries
Type
Lagging
Impact
Revenue
Unit
%
Measurement frequency
Monthly / Quarterly / Annual
Formula
((Revenue this period − Revenue last period) / Revenue last period) × 100

How to calculate it

Subtract last period's revenue from this period's, divide by last period's, and multiply by 100.

For example, if revenue rose from 8,000,000 to 8,800,000, growth is 10%.

Compare like periods, such as the same quarter last year, to remove seasonality, and split growth into price, volume and new customers.

Where it is used

  • Tracking performance

    See the pace of growth.

  • Setting goals

    Plan targets.

  • Explaining results

    Understand what drove change.

How to improve it

Tips and common mistakes

  • Growth at the expense of margin may not be healthy.
  • Growth rates fall as the base grows.
  • Use consistent definitions of revenue.

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