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Revenue Growth Rate Formula
Growth Rate = (Current Revenue - Previous Revenue) / Previous Revenue × 100
Growth Rate Benchmarks
| Growth | Category |
|---|---|
| 100%+ | Hypergrowth |
| 50–100% | High growth (early-stage SaaS) |
| 20–50% | Strong growth |
| 10–20% | Moderate growth |
| 0–10% | Slow growth / maturing |
| Negative | Declining |
CAGR for Multi-Year Analysis
CAGR = (End Revenue / Start Revenue)^1 / n - 1
CAGR normalizes uneven growth across years. A company that grew 30%, then 10%, then 50% had a CAGR of ~27.5% — more informative than any single year.
Rule of 40
The Rule of 40 is the primary SaaS health benchmark:
Rule of 40 = Growth Rate + Net Margin
A score ≥ 40 indicates a balanced, sustainable SaaS business. A company growing at 60% can operate at −20% margin and still score 40. A slow-grower at 10% needs a 30%+ margin to pass.