Growth Rate Calculator
Calculate growth rates in any format — Year over Year, Month over Month, Quarter over Quarter, or custom periods. Instantly see your growth rate, absolute change, and whether you are accelerating or decelerating.
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Understanding Growth Rate Metrics
Growth rate is the most fundamental metric in business. It tells you whether your business is expanding, stagnating, or contracting. Different time frames reveal different insights — monthly growth shows momentum, quarterly growth removes noise, and annual growth shows the big picture.
Choosing the Right Time Frame
Use MoM growth for operational decision-making and detecting early trends. Use QoQ for board reporting and strategic planning. Use YoY for investor communications, annual planning, and removing seasonal effects. For early-stage startups, weekly or monthly growth is most actionable.
Growth Rate vs CAGR
Simple growth rate compares two points in time. CAGR (Compound Annual Growth Rate) smooths growth over multiple periods to give an average rate. If your revenue went from $1M to $4M over 3 years, the total growth is 300%, but the CAGR is 59% — the steady annual rate that would produce the same result.
The T2D3 Framework
The T2D3 framework suggests successful SaaS companies should Triple revenue twice, then Double three times. This means ~200% growth years 1-2, then ~100% growth years 3-5. After that, growth typically slows to 30-50% as the company scales past $100M ARR.
Frequently Asked Questions
- How do you calculate growth rate?
- Growth Rate = ((New Value − Old Value) / Old Value) × 100. For example, if revenue grew from $100K to $130K, the growth rate is ($130K − $100K) / $100K × 100 = 30%. This formula works for any metric: revenue, users, profit, or any other numerical value.
- What is the difference between YoY, MoM, and QoQ growth?
- YoY (Year over Year) compares the same metric across two consecutive years. MoM (Month over Month) compares consecutive months. QoQ (Quarter over Quarter) compares consecutive quarters. YoY is best for seeing annual trends and removing seasonality. MoM shows short-term momentum. QoQ balances between the two.
- What is compound growth rate?
- Compound growth rate (CAGR) is the average annual growth rate over multiple periods, accounting for compounding. Formula: CAGR = (End Value / Start Value)^(1/n) − 1, where n is the number of periods. It smooths out volatility and shows the steady growth rate that would produce the same result.
- What is a good growth rate for a startup?
- Y Combinator defines good startup growth as 5-7% per week. Monthly, that translates to roughly 20-30%. For SaaS companies: 100%+ YoY is exceptional (T2D3 rule), 50-100% is strong, 20-50% is solid. Growth benchmarks vary significantly by stage, industry, and business model.
- Why is growth rate important for investors?
- Growth rate is the single most important metric investors evaluate. High growth signals strong product-market fit, large market opportunity, and effective execution. Investors often value growth over profitability at early stages. The 'Rule of 40' says growth rate + profit margin should exceed 40% for healthy SaaS companies.