— Business & Valuation
CAGR Revenue Growth Calculator
Calculate revenue CAGR from start and end revenue or a year-by-year series. Compare the smoothed CAGR line with actual revenue, project forward, find growth needed for a target, and adjust for inflation or segments.
Revenue CAGR
14.87%
- Total cumulative growth
- 100%
- Projected revenue (+3 yrs)
- $3,031
Try: Lumpy 5-year series, Simple 2×, 5 years, Required to hit target, Real CAGR (4% inflation)
— Actual versus the smoothed CAGR path
| Year | Actual revenue | CAGR-smoothed | YoY growth | Variance |
|---|---|---|---|---|
| Year 0 | $1,000 | $1,000 | $0 | |
| Year 1 | $1,100 | $1,149 | 10% | $-49 |
| Year 2 | $1,400 | $1,320 | 27.27% | $80 |
| Year 3 | $1,300 | $1,516 | -7.14% | $-216 |
| Year 4 | $1,700 | $1,741 | 30.77% | $-41 |
| Year 5 | $2,000 | $2,000 | 17.65% | $0 |
— CAGR by segment (over 5 years)
| Segment | Start | End | CAGR |
|---|---|---|---|
| Enterprise | $400 | $1,050 | 21.29% |
| SMB | $350 | $650 | 13.18% |
| Consumer | $250 | $300 | 3.71% |
— Growth — smoothed and as it actually happened
Download— How it works
CAGR = (Ending revenue ÷ Beginning revenue)^(1 ÷ years) − 1. With a year series, begin = first year, end = last year, years = (number of values − 1). Real CAGR = (1 + CAGR) ÷ (1 + inflation) − 1.
What revenue CAGR is — and how to read it
The compound annual growth rate is the steady yearly rate that, compounded over the period, turns the beginning revenue into the ending revenue. It uses only three numbers — the start, the end and the years between — so it works the same whether you type two figures or a full series of annual revenues (in which case the first and last values become the begin and end, and the number of years is one less than the count of values). The result is a single, comparable growth rate: it lets you put a company that grew from 1,000 to 2,000 over five years on the same footing as any other, regardless of how bumpy the road was.
Because it compounds, CAGR is not the total gain divided by the years. Doubling revenue over five years is 100% in total but only about 14.9% a year — each year builds on the last. And it is not the average of the annual growth rates either: a year up 40% and a year down 40% averages to zero but actually leaves revenue down 16%. CAGR reflects what genuinely happened to the top line; a simple average does not.
Worked example — revenue of 1,000, 1,100, 1,400, 1,300, 1,700, 2,000 over five years: CAGR = (2,000 ÷ 1,000)^(1 ÷ 5) − 1 = 2^0.2 − 1 ≈ 14.87% a year. Total cumulative growth = 2,000 ÷ 1,000 − 1 = 100% (a 2× over the period). Note the CAGR ignores the dip in year 3 entirely — see the chart.
Why the smoothed number can mislead
A single CAGR says nothing about the path. Two companies can post the identical 14.9% CAGR while one grew steadily and the other spiked, stalled and recovered — and the difference matters enormously for how durable the growth is. That’s why this calculator plots your actual revenue against the smoothed CAGR line: where the real figures sit above the line, growth front-loaded; where they sit below, it back-loaded or stumbled. A CAGR flattered by one blockbuster year is a very different business from one compounding reliably, even though the headline rate is the same.
Two other traps worth knowing. CAGR is acutely sensitive to the endpoints: pick a depressed base year or a peak final year and you can manufacture an impressive rate that says more about timing than performance. And a high CAGR off a tiny base is easy — trebling from 1 to 3 is a 200% CAGR over a year but means little. Always read CAGR alongside the actual path and the size of the base.
Projecting, real growth, targets and segments
Used carefully, CAGR is also a planning tool. Project it forward and you get a baseline forecast — extending 14.87% three years past a 2,000 end lands near 3,030 — though this naively assumes the past rate persists, which for revenue rarely holds as the base grows (the law of large numbers drags growth rates down). Flip it round in “Hit a target” mode and the calculator solves for the CAGR you’d need to reach a goal from today’s revenue in a set number of years — the growth a plan demands. Enter an inflation rate and it strips inflation out to show the real CAGR, the genuine growth in volume rather than just higher prices. And the segment table computes a CAGR for each part of the business, which often reveals that the blended company rate is carried by one or two segments while others quietly shrink.
— Reader questions
How do you calculate revenue CAGR?
CAGR = (ending revenue ÷ beginning revenue)^(1 ÷ number of years) − 1. For revenue that grew from 1,000 to 2,000 over five years, that’s (2,000 ÷ 1,000)^(1 ÷ 5) − 1 = 2^0.2 − 1 ≈ 14.87% a year. If you enter a year-by-year series instead, the first value is the beginning, the last is the ending, and the number of years is one less than how many values you entered.
Why is the CAGR lower than my average annual growth?
Because CAGR is a geometric (compounding) rate, not a simple average of the yearly growth percentages. Averaging the annual rates over-weights good years and ignores that a percentage fall lands on a bigger base than the rise before it. A year up 40% then a year down 40% averages to 0% but actually leaves you down 16% — CAGR correctly shows the decline, the simple average doesn’t.
What’s a good revenue CAGR?
It depends entirely on the company’s stage and size. A young SaaS business might compound revenue at 40–100%+ a year early on; a mature consumer company growing high single digits is doing well. Growth almost always decelerates as the revenue base gets larger, so the same percentage is far harder to sustain at scale. Judge it against peers, the market’s growth and the size of the base, not an absolute number.
Can revenue CAGR be misleading?
Yes — that’s why this calculator plots the actual path. A single CAGR hides volatility: two companies with the same rate can have completely different, and differently durable, growth stories. It’s also very sensitive to the start and end years you pick, and a high rate off a tiny base means little. Always read the CAGR alongside the actual year-by-year revenue and the size of the base it grew from.
How do I find the growth rate I need to hit a revenue target?
Use “Hit a target” mode: enter today’s revenue as the beginning, the target as the ending, and the number of years you have. The calculator solves the CAGR formula for the rate — the required revenue CAGR. For example, going from 5,000 to 12,000 in four years needs (12,000 ÷ 5,000)^(1 ÷ 4) − 1 ≈ 24.3% a year.
What is real (inflation-adjusted) revenue CAGR?
It’s the CAGR with inflation stripped out: (1 + CAGR) ÷ (1 + inflation) − 1. It separates genuine volume or share growth from simply charging higher prices. Revenue growing 10% a year while prices rose 4% is really compounding at about 5.8% in real terms — meaningfully less than the nominal headline suggests.