Revenue Growth Rate
Definition
The percentage increase in a company's revenue over a specific period, typically measured year-over-year or quarter-over-quarter. Revenue growth rate is a fundamental measure of business expansion, market traction, and the effectiveness of go-to-market strategy.
Complementary Terms
Concepts that frequently appear alongside Revenue Growth Rate in practice.
The percentage change in a metric from one year to the next, used to assess trends while neutralising seasonal effects. YoY growth rates in revenue, productivity, and intangible asset investment are fundamental to performance evaluation, valuation modelling, and growth accounting analysis.
The percentage of recurring revenue retained from existing customers over a period, including expansion revenue from upsells and cross-sells. NRR above 100% indicates that growth from existing customers outpaces losses from churn, a hallmark of strong product-market fit.
The percentage of customers or revenue lost over a given period. Customer churn measures the proportion of subscribers who cancel, while revenue churn accounts for the monetary impact of downgrades and cancellations.
The percentage of recurring revenue retained from existing customers over a period, excluding any expansion revenue. GRR isolates the impact of churn and contraction and can never exceed 100%.
A go-to-market strategy where the product itself serves as the primary driver of customer acquisition, conversion, and expansion, rather than traditional sales-led approaches. PLG companies offer free trials, freemium tiers, or self-service onboarding that allows users to experience value before engaging with sales teams.
The rate at which a company's existing customers cease doing business with it over a given period, typically expressed as an annual percentage. Customer attrition rate is a critical input to the valuation of customer relationship intangible assets under both the multi-period excess earnings method and the distributor method.
The total predictable revenue a subscription business earns each month, normalised to exclude one-time charges. MRR is tracked as new MRR, expansion MRR, contraction MRR, and churned MRR to understand the drivers of revenue movement.
A dividend discount model that values a perpetual stream of cash flows growing at a constant rate, calculated as the next period's cash flow divided by the difference between the discount rate and the growth rate. The Gordon growth model is widely used to estimate terminal value in discounted cash flow analyses and requires that the assumed growth rate remains below the discount rate.
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