The standard way to describe how fast a business is changing. Growth rates can apply to revenue, customer count, MRR, profit - almost any metric. The most-asked question in business reporting is usually some version of "what's the growth rate?"
Definition
Growth Rate - the percentage change in a metric over a defined period. Common forms: month-over-month (MoM), quarter-over-quarter (QoQ), year-over-year (YoY), and compound monthly growth rate (CMGR).
Common uses
- Performance comparison - period over period, business vs business
- Investor and lender conversations - the most-quoted metric in funding
- Forecasting baseline - assumptions for future periods start with recent growth rates
Watch out
Growth rate alone doesn't tell you about quality. A business with 50% growth at deteriorating LTV:CAC is in worse shape than one with 25% growth at stable unit economics.