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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