Why CAGR beats simple % change
A $1M business that grew to $4M in 4 years didn't grow 300% per year — it grew 41% CAGR. CAGR is the smoothed annual rate that, compounded over the period, lands you at the end value. Always quote CAGR for multi-year comparisons.
Volume × price × mix decomposition
Revenue growth = volume growth × price growth × mix effect. If revenue is up 20% but volume is up 5% and price is up 8%, mix is contributing 7% — meaning customers are buying a more expensive product. Healthy growth has all three contributing; bad growth is 100% price.
Related guides
Long-form playbooks on the same topic, written by the RevenueLab editorial team.
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Read the guideSaaS Pricing Strategy: Per-Seat, Usage, Tiers, and the Hybrid Future
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Read the guideFAQ
What's a good revenue increase year-over-year?
Depends on stage: <$1M revenue → 100%+ expected. $1–10M → 40–80%. $10–100M → 20–50%. >$100M → 15–30%. Below these bands signals competitive or product issues.
How do I calculate CAGR?
CAGR = (Ending value ÷ Beginning value)^(1/years) − 1. For $500K growing to $1M in 3 years: (1,000,000 ÷ 500,000)^(1/3) − 1 = 26% CAGR.
Is CAGR the same as average growth rate?
No. CAGR is compound — it accounts for the fact that each year's growth builds on the previous year's base. Average annual growth (arithmetic mean) overstates real returns.
How this calculator is built
Independently maintained
Written by Sam Doshi and the RevenueLab editorial team. We don't sell the data feeds this tool is built on.
Sourced from primary data
Benchmarks come from public AdSense / Stripe / IRS disclosures and reader-submitted data — never third-party "$X per view" claims. Full methodology.
Last reviewed
June 2026. We re-check every figure on the platform on a rolling quarterly cycle.
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See our editorial policy and disclaimer. Results are estimates, not advice.