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Growth endurance measures a company’s ability to sustain high revenue growth as it scales. It’s calculated by dividing the current year’s growth by the previous year’s. For example, if a company’s revenue grew by 80% last year and 70% this year, its growth endurance would be 87.5%, because 80% is 87.5% of $80%. That means the company retained nearly 90% of its growth momentum. So while a 13% drop in growth might be concerning—maybe even a reason to run for the hills—growth endurance asks you to pause and look a bit deeper.
(For context, 80% growth endurance is considered strong for a public company.)
A slowdown in growth is normal as a company scales. We’ve seen it with Salesforce and Twilio. The larger a company gets, the harder it becomes to double, triple, or quadruple revenue year after year. In fact, doubling revenue over $100M ARR is so rare that BVP calls these companies “centaurs,” noting they are seven times rarer than unicorn companies.
Even Braze had 100% growth endurance in 2019 and 2020, but that dropped to 63% in 2021. Like many public companies, Braze stopped reporting growth endurance. However, for private SaaS and CPaaS companies, it remains a valuable metric, especially when absolute dollar growth looks lackluster.
What Does the Metric Mean?
Several factors drive growth endurance: market size, product-market fit, go-to-market strategy, account expansion, and launching new products. It is easiest to calculate when the revenue is recurring like ARR versus a usage model. For companies like Salesforce and Twilio, that are a combination of multiple businesses, and M&A activity can impact the predictability of the revenue outlook.
For a brilliant discussion on growth endurance, see the OnlyCFO’s newsletter about AppFolio.
As companies scale, maintaining high growth gets tougher due to market saturation, competition, and complexity. Growth endurance helps gauge how sustainable that growth is. Modest growth is fine—so long as it doesn’t decay.
This metric matters because it shows if a company can sustain growth as it scales. For public cloud companies, 80% is solid. For private ones, 70% is good.
Finally
To use a running analogy, it’s not just about how fast you’re running; it’s about how long you can keep up the pace without stumbling. It’s not about doing a seven-minute mile; it’s whether you can sustain that pace for the next five.