Revenue Growth

In short

Year-over-year percentage increase in total sales

If a company sold $100M last year and $120M this year, revenue grew 20%. Fast growth is exciting but check if it's profitable growth or just spending more to sell more.

Revenue growth rate measures top-line expansion. Sustainable growth above 15% annually is impressive for mid/large-cap stocks. Hypergrowth (>50%) is common in early-stage companies but usually decelerates. Organic growth (not from acquisitions) is higher quality.

Formula

Revenue Growth = (Current Revenue - Prior Revenue) ÷ Prior Revenue × 100

Thresholds

<0: Declining — concerning
0-10: Stable/mature
10-25: Solid growth
>25: Hypergrowth

Related concepts

Earnings Per Share (EPS) — If a company earns $1 billion and has 100 million shares, each share 'earned' $10. Growing EPS over time is a main driver of stock price growth — but check whether it's coming from more profit or just fewer shares outstanding after buybacks, since both raise the number.
PEG Ratio — If a stock has a P/E of 30 and analysts expect 30% annual earnings growth, its PEG is 1.0 — a fair multiple for that growth rate. A stock with the same P/E of 30 but only 10% expected growth has a PEG of 3.0, meaning investors are paying far more per unit of growth.
Gross Margin — If you sell a sandwich for $10 and the ingredients cost $3, your gross margin is 70% — the product itself is highly profitable before rent, salaries, or marketing even enter the picture. A supermarket reselling the same sandwich for $10 after paying $8 to stock it has a gross margin of just 20%.