Growth Rate Calculator

What is Growth Rate?

Growth rate is the percentage change in a value over a specific period. It’s one of the most important metrics for measuring business performance, whether you’re tracking Monthly Recurring Revenue (MRR), user acquisition, website traffic, or any other key performance indicator (KPI).

How to Calculate Growth Rate

The growth rate formula is straightforward:

Growth Rate (%) = [(Current Value - Previous Value) / Previous Value] × 100

Where:

• Previous Value: The starting value at the beginning of the period
• Current Value: The ending value at the end of the period

Growth Rate Calculation Example

If your MRR last month was $10,000 and this month it’s $12,000:

• Growth Rate = [($12,000 - $10,000) / $10,000] × 100
• Growth Rate = ($2,000 / $10,000) × 100
• Growth Rate = 20%

A negative result indicates a decline or negative growth rate.

Common Use Cases for Growth Rate Calculations

1. MRR Growth Rate

SaaS companies track Monthly Recurring Revenue growth to measure business health and predict future revenue.

2. User Growth Rate

Calculate how quickly your user base is expanding month-over-month or year-over-year.

3. Revenue Growth Rate

Essential for investors and stakeholders to understand business trajectory and performance.

4. Website Traffic Growth

Digital marketers use growth rate to measure the effectiveness of SEO and marketing campaigns.

5. Employee Growth Rate

HR teams track workforce expansion to plan resources and understand company scaling.

Types of Growth Rate Calculations

Month-over-Month (MoM) Growth Rate

Compares metrics between consecutive months. Useful for tracking short-term trends and seasonal patterns.

Year-over-Year (YoY) Growth Rate

Compares the same period across different years. Eliminates seasonal variations for more accurate long-term analysis.

Compound Annual Growth Rate (CAGR)

Measures the mean annual growth rate over a specified period longer than one year. CAGR smooths out volatility for a clearer picture of growth trends.

CAGR Formula: CAGR = [(Ending Value / Beginning Value)^(1/n) - 1] × 100

Where n = number of years

What is a Good Growth Rate?

Growth rate benchmarks vary significantly by industry, company stage, and metric:

• Early-stage startups: 20-50% monthly growth is common
• Established SaaS companies: 10-20% annual growth is healthy
• Mature enterprises: 5-10% annual growth is typical

Remember that sustainable growth is often more valuable than explosive but short-lived spikes.

Growth Rate Best Practices

1. Consistency is Key: Always compare the same time periods (monthly to monthly, quarterly to quarterly)
2. Context Matters: A 50% growth rate on $1,000 is less impactful than 10% growth on $1,000,000
3. Track Multiple Metrics: Don’t rely on a single growth metric; monitor various KPIs for a complete picture
4. Account for Seasonality: Some businesses have natural fluctuations; YoY comparisons help normalize these

Frequently Asked Questions

Q: How do you calculate growth rate between two numbers?

A: Use the formula: [(New Value - Old Value) / Old Value] × 100. Enter your values in our calculator above for instant results.

Q: What does negative growth rate mean?

A: A negative growth rate indicates a decrease or decline. For example, -10% growth means the value decreased by 10% from the previous period.

Q: Can you calculate growth rate if the starting value is zero?

A: When the starting value is zero, the traditional formula results in undefined or infinite growth. Our calculator handles this special case appropriately.

Q: What’s the difference between growth rate and growth percentage?

A: They’re the same thing. Growth rate is expressed as a percentage, so “20% growth rate” and “20% growth percentage” mean identical things.

Q: How do I calculate average growth rate over multiple periods?

A: For simple average: add all period growth rates and divide by the number of periods. For compound growth, use the CAGR formula mentioned above.

Start Calculating Your Growth Rate

Use our free growth rate calculator above to instantly calculate percentage change between any two values. Whether you’re tracking business metrics, analyzing investments, or measuring performance, accurate growth rate calculations are essential for data-driven decisions.