Top-line numbers look good… but is the business?

It’s easy to celebrate revenue growth.
Big numbers. Up-and-to-the-right graphs. More zeros on investor updates.

But here’s the uncomfortable truth: not all growth is good growth.

You can be growing revenue month-on-month and still be building a business that’s burning cash, bleeding margin, and quietly heading toward a wall. And by the time you realise it, you’re hiring too fast, the burn rate’s out of control, and the next raise is starting to feel shaky.

So how do you know if your growth is healthy — not just visible?

Let’s dig into the difference.

What looks like growth (but isn’t healthy)

Growing revenue, shrinking margin

You’ve got more customers — but each one costs more to serve.
You’re discounting heavily. Customer success is drowning. Support costs are creeping up. The result? Your gross margin is falling — even as revenue grows.

This is a classic red flag. Healthy growth should improve — not erode — your margin over time.

New revenue is masking churn

You’re celebrating record MRR this month. But if you dig in, most of it came from replacing churned customers, not net new growth.

If you’re not tracking net revenue retention (NRR), you might be growing the top line while your customer base quietly turns over behind the scenes.

Healthy growth is layered — new customers on top of existing ones, not just treading water.

Burn rate is rising faster than revenue

You’ve hired ahead. You’ve invested in marketing. You’ve built infrastructure. All good — if it’s converting into future revenue.

But if operating costs are growing faster than revenue, you’re headed toward a runway problem. Healthy growth brings you closer to profitability, not further away.

Revenue is up… but cash flow is a mess

You’re closing deals — but payment terms are dragging. Customers are late to pay. You’ve got revenue on paper but not in the bank.

This disconnect means you’re still cash-poor, even if your numbers look great in a deck. It’s a visibility issue — and one that can bite fast if you don’t catch it.

What does healthy growth look like?

Strong gross margin

As revenue grows, your cost to deliver each unit of value should become more efficient. In SaaS, that usually means 70–90% gross margins. In product businesses, it might be 30–50% — but the key is movement in the right direction.

If your gross margin is holding (or improving), that’s a good sign.

Net revenue retention (NRR) > 100%

If you’re expanding existing customers — through upgrades, upsells, or organic growth — you’re not just replacing lost revenue. You’re compounding.

This is one of the clearest indicators of healthy growth. A business with NRR > 100% can grow even without new customers.

CAC payback under control

Acquiring customers is great. But if it takes 18+ months to make that money back, you’re fuelling growth with investor cash — not business fundamentals.

Healthy growth keeps CAC in check and payback periods below 12 months (ideally 6–9 in SaaS).

Predictable, recurring revenue

One-off spikes are fine. But sustainable growth comes from predictable revenue — renewals, subscriptions, long-term contracts.

Healthy businesses don’t start every quarter at zero. They build on a stable base.

It’s not just about growth — it’s about leverage

You want growth that gives you options:

• The option to raise, because your numbers are strong
• The option not to raise, because you’re profitable
• The option to invest, because your margins support it

That only happens when revenue is backed by strong fundamentals — not just hype.

Growth is easy to chase, harder to control

Everyone loves a fast-growth story. But founders who scale well — not just fast — tend to win longer term.