Growth & Metrics

Revenue Waterfall Analysis

Revenue Waterfall breaks down revenue changes into components: new customers, expansion revenue, churn, contraction. It identifies growth drivers and problem areas.

When to Use This Framework

Understanding revenue drivers
Identifying optimization opportunities
Planning growth initiatives
Communicating financial performance

How to Apply This Framework

  1. 1

    Calculate starting revenue

  2. 2

    Add new customer revenue

  3. 3

    Add expansion revenue

  4. 4

    Subtract churn revenue

  5. 5

    Subtract contraction revenue

  6. 6

    Calculate ending revenue

  7. 7

    Calculate percentages of each component

Real-World Examples

SaaS companies tracking expansion vs. churn

Slack minimizing churn in competitive market

Stripe balancing new logo growth with expansion

Strengths

  • Shows revenue drivers clearly
  • Identifies problem areas
  • Guides strategic decisions

Limitations

  • Requires clean financial data
  • Can hide segment-level issues
  • Doesn't show root causes

Related Frameworks

Consider combining this framework with:

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