How to Calculate Revenue Growth for 3 Years

By Motley Fool Staff – Updated Apr 29, 2025 at 10:45 PM

Key Points

Revenue growth calculates by dividing the end revenue by start, then raising to power of 1/years.
The example shows a 3-year compound annual growth rate of 14.5% using exponent and subtraction methods.
Verify growth by recalculating yearly results; adjust the time frame by changing the exponent's denominator.

Many investors seek companies that can improve their sales at above-average rates, which is why it's useful to know how to calculate revenue growth from one year to the next.

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A business person calculating profit from revenue. — Image source: Getty Images.

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Determining the growth rate over a one-year period is straightforward; you simply take the sales difference, divide it by the starting revenue total, and multiply the result by 100. The math is slightly more complicated for a three-year period, but below, we'll outline the entire calculation.

Our example company had the following revenue performance:

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At the beginning of our three-year period, that is, at the end of year zero, the sales base sat at $30 million. It grew to $33 million by the end of year 1, to $41 million by the end of year 2, and to $45 million by the end of year 3. So in three years, the revenue grew by 50%, or $15 million. But how much did it grow per year?

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