Definition
Revenue growth rate measures how quickly a company is expanding its top line. Sustained high growth (20%+) is characteristic of growth-stage companies, while mature companies typically grow at GDP-like rates (2-5%). Organic growth (excluding acquisitions) is more valuable than acquisition-driven growth.
functions Formula
Growth Rate = (Current Revenue − Prior Revenue) / Prior Revenue × 100%
lightbulb Example
Revenue grew from $80M to $100M year-over-year. Growth rate = ($100M - $80M) / $80M = 25%. At this rate, revenue doubles approximately every 3 years.
verified_user Key Points
- Organic growth is more sustainable than acquisition-driven
- Accelerating growth is a strongly bullish signal
- Revenue growth without margin expansion raises questions
- CAGR smooths multi-year growth calculation