How to calculate your revenue growth rate
Revenue growth rate shows how fast your sales (or turnover) are rising or falling between two periods. Here's the formula, two worked examples and the mistakes to avoid.
The revenue growth formula
Revenue growth rate (%) = (revenue this period − revenue last period) ÷ revenue last period × 100
A positive result means your revenue grew, and a negative result means it fell.
Worked examples
Two examples
| Comparison | Previous period | Current period | Growth rate |
|---|---|---|---|
| Month on month | $60,000 | $66,000 | 10% |
| Year on year (e.g. FY26 vs FY25) | $750,000 | $675,000 | −10% |
In the first example, revenue rose by $6,000 on a base of $60,000, which is a growth rate of 10%. In the second, revenue for the financial year fell by $75,000 on a base of $750,000, which is a growth rate of −10%.
Common mistakes
- Comparing unequal periods. Comparing a 31-day month with a 28-day February can distort monthly growth.
- Ignoring seasonality. If your trade peaks at certain times of year, such as Christmas and summer, Boxing Day or the EOFY sales in June, compare a period with the same period a year earlier.
- Mixing one-off revenue with recurring revenue. A single large order can make growth look stronger than it really is.
Frequently asked questions
What's the difference between month on month and year on year growth?
Month on month compares one month with the month before it. Year on year (often shortened to YoY) compares a period with the same period a year earlier, which removes most seasonal effects.
Can the revenue growth rate be negative?
Yes. A negative growth rate means your revenue fell between the two periods.