How to calculate revenue growth
Revenue growth compares current revenue against a prior period, or forecasts future revenue by compounding a monthly growth rate. This calculator models where revenue could land after multiple months of consistent growth.
- • Use net revenue, not vanity gross volume, for serious planning.
- • Compare monthly growth and annualized run-rate.
- • Model conservative, base, and aggressive cases before making hiring or ad spend decisions.
Why compounding matters
A small monthly growth rate can become meaningful over a year. But compounding also works in reverse: churn, seasonality, and retention issues can flatten growth faster than a simple spreadsheet suggests.
FAQ
What is the revenue growth formula?
Growth rate = (current revenue - previous revenue) divided by previous revenue. Forecast revenue can be modeled as starting revenue multiplied by (1 + growth rate) for each period.
What is good monthly revenue growth?
It depends on company stage. Early projects may grow fast from a small base, while mature businesses often prioritize steady, profitable growth.
Should I use MRR or total revenue?
For subscription businesses, MRR is usually best. For content, ecommerce, or ads, use the revenue metric you actually manage month to month.