Blog / Product Series
KPI: Revenue Growth Rate (%)
Dave Willson
July 5, 2025
While absolute revenue growth shows the dollar change month-over-month, Revenue Growth Rate (%) zooms out to show the pace of change—standardized across time and revenue size. It answers a different, but equally important question:
“How fast is our revenue growing relative to where we started?”
This KPI helps business leaders compare performance across time periods, locations, products, and even peer companies—because percentages normalize growth.
Revenue Growth Rate Formula
Revenue Growth % = (Current Month Revenue – Previous Month Revenue) / Previous Month Revenue × 100
This gives you a clean, normalized view of your revenue change. A 13.75% increase in June 2025, for example, indicates that your top line grew by nearly 14% compared to May—regardless of the actual revenue volume.
Why Percentage-Based Growth Matters
Dollar growth is concrete—but percentage growth is comparable.
Let’s say:
- A business grows from $50,000 to $60,000 → $10,000 gain = 20% growth
- Another grows from $300,000 to $310,000 → $10,000 gain = 3.3% growth
Same dollar growth, very different growth rates.
Revenue Growth Rate reveals how fast you're scaling relative to your own size.
Why Monitor Revenue Growth Rate?
1. Detects Acceleration or Slowdown
Growth rate trends help identify whether the business is:
- Scaling steadily
- Peaking seasonally
- Plateauing or declining
In your Levelup chart, you can clearly see growth spikes (e.g., Jan 2025) and pullbacks (e.g., Apr 2025), helping you course-correct faster.
2. Enables Fair Comparisons
Growth rate levels the playing field:
- Compare performance across business units or locations of different sizes
- Benchmark against competitors regardless of revenue scale
- Analyze the effectiveness of new strategies (marketing, sales, pricing) by % impact
3. Improves Forecasting Models
Revenue Growth Rate feeds directly into predictive models:
- Compound growth trends over time
- Build best-case, base-case, and worst-case revenue forecasts
- Evaluate pipeline contribution from sales and marketing activities
Use Revenue Growth % in Tandem with Other Metrics
- With Absolute Growth Combine with the dollar-based KPI to see both how much and how fast you're growing.
- With Gross Profit Margin High growth but weak GPM? Your top line may be expanding unsustainably.
- With Operating Profit Margin A rising growth rate with falling operating margins could signal cost inefficiencies.
When and How to Use
- Track Monthly Like most Levelup KPIs, Revenue Growth Rate is calculated monthly. This cadence allows you to spot inflection points quickly and adjust strategies mid-quarter.
- Spot Trends, Not Noise Use the growth rate trendline—not just a single data point—to evaluate performance. A single spike might be noise; a rising slope is a signal.
- Apply Accrual Accounting As with other margin KPIs, accrual-based revenue provides more accurate growth trends. Timing mismatches from cash accounting can distort true performance.
Conclusion: Understand the Pace of Progress
Revenue Growth Rate (%) is essential for any business leader who wants to understand not just if the company is growing—but how quickly.
It’s the metric that makes your top-line performance measurable, comparable, and forecastable.
To get the most out of it:
- Track monthly and watch the trendline
- Combine it with margin and absolute KPIs
- Use it in forecasting and benchmarking
- Normalize results across products, teams, or periods
Growth in isolation isn’t enough—Revenue Growth Rate helps you assess the velocity of your success.
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