Simple CAGR

Revenue Growth Calculator

Enter two revenue figures and how far apart they are. You’ll get total growth, the steady rate per month or quarter, and what that works out to over a year.

Growth over time

Year by year

How It Works

Three ways to describe the same growth.

Total change

The simplest measure: how much bigger (or smaller) is the ending figure?

Total = End ÷ Start − 1

It’s easy to understand, but it doesn’t tell you how fast. Doubling in one year and doubling in five years both show up as +100%.

Growth per period

This is the steady monthly (or quarterly) rate that gets you from start to end. It’s what people usually mean by “we grow 6% month over month.”

g = (End ÷ Start)1/n − 1

Here n is the number of months, quarters or years between your two figures.

Annualized growth

To compare across businesses or time frames, convert everything to a yearly rate:

Annualized = (End ÷ Start)1/years − 1
Try it. MRR goes from $10,000 to $20,000 in 12 months. That’s 5.95% a month, compounded, and 100% annualized.

MRR and ARR, in plain terms

  • MRR (monthly recurring revenue) is the subscription revenue you can count on each month. It leaves out one-time fees.
  • ARR (annual recurring revenue) is usually just MRR × 12. It’s a snapshot of your current pace, not revenue you’ve actually earned over a year.
  • Pick MRR or ARR above and we’ll show the other one for your ending figure.
Worked Examples

A few real-world examples.

A SaaS company doubling in a year

MRR grows from $10,000 to $20,000 over 12 months.

(20,000 ÷ 10,000)1/12 − 1 = 5.95% a month

A steady 5.9% a month doesn’t sound dramatic, but compounded over a year it doubles the business.

Quarterly numbers

Quarterly revenue goes from $1.2 million to $1.8 million over 6 quarters.

(1.8 ÷ 1.2)1/6 − 1 = 6.99% a quarter

That’s 50% total, or 31.0% annualized.

A year-over-year decline

Annual revenue falls from $2 million to $1.5 million over 2 years.

(1.5 ÷ 2)1/2 − 1 = −13.40%

A 25% drop over two years is about 13.4% lost each year. Shrinking works the same way as growing.

Why you shouldn’t average monthly growth

Say your monthly growth went +20%, −10%, +20%, −10%. The simple average is 5% a month.

But the real compounded rate is only 3.92% a month. Bad months hurt more than good months help, so averaging makes things look rosier than they are. Using the start and end figures, like this calculator does, avoids the problem.

Frequently Asked

Common questions about revenue growth.

What does “month-over-month growth” mean?

It’s how much revenue grew from one month to the next, as a percentage. When people quote a single month-over-month rate for a longer stretch, they usually mean the steady compounded rate, which is the “per month” figure this calculator gives you.

Is ARR the same as annual revenue?

Not quite. ARR is a run rate: your current recurring revenue, scaled up to a year. Annual revenue is what you actually brought in over the past twelve months, including one-time income. A growing company’s ARR is usually higher than its trailing annual revenue.

Why is the annualized number so much bigger than the monthly one?

Because it compounds twelve times. A rate that looks modest each month can add up to a big number over a full year. That’s exactly why it helps to see both.

Can I annualize just a few months of data?

You can, and the calculator will show it, but read it with care. It assumes your recent pace will keep going for a whole year, and young businesses often see growth slow down as they get bigger.

How should I handle seasonal businesses?

Compare the same point in the cycle, like this December against last December. Measuring from a slow month to a busy one will make growth look much better than it really is.

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