Compound annual growth rate (CAGR)

The steady yearly growth rate that would take a figure from its starting value to its ending value over several years. It smooths out the good and bad years in between.

Simple example

Revenue grows from $100 to $200 over five years, with some strong and some weak years. The CAGR is about 15%, because growing 15% every year would turn $100 into roughly $200 in five years.

Year 0Year 1Year 2Year 3Year 4Year 5$100$200ActualAbout 15% every year
Made-up numbers, for illustration only.