Revenue Growth
How many percent this period's revenue grew over the same period a year ago — how fast the company is growing in size.
In plain terms
If you sold $100M in the same quarter last year and $120M in the same quarter this year, revenue grew 20%. That 20% is revenue growth.
Why compare with "the same quarter a year ago" rather than "the previous quarter"? Because many businesses are seasonal (selling more in winter, etc.). Comparing the same season is fairer. This comparison is called YoY (year over year).
What it tells you
Revenue growth most directly shows whether a company is widening its place in the market or has stalled. Since revenue usually moves before profit, it is read as an early signal of growth.
Especially at growth companies with still-small profit, how fast and steadily this revenue grows becomes the key to gauging the company's future.
Formula
revenue growth = (this quarter's revenue − year-ago quarter's revenue) ÷ year-ago quarter's revenue × 100
What high or low means
High revenue growth means size is expanding fast. But as a company grows, the comparison base (last year's revenue) grows too, so growth rates often slow naturally over time.
So more than one quarter's absolute figure, the trend of whether growth is accelerating or slowing matters more.
Even when revenue rises, whether it carries through to profit and cash is a separate matter. Many companies grow revenue while accepting losses, so revenue growth has to be read with net margin and FCF to know whether it is "growth that keeps anything" (Stocklore's context reading flags the "growth without cash" pattern).
Growth that just got bigger by buying another company (acquisition) and growth where the core business grew on its own (organic growth) differ in quality. When revenue suddenly jumps, you need to check whether it is due to an acquisition.
A large one-off contract or a temporary price hike can make a single quarter spike, so read several quarters' flow to see the real growth trajectory.
After its 1997 IPO, Amazon grew revenue explosively for about 20 years while earning almost no profit. Founder Jeff Bezos, instead of keeping profit, poured that money back into expanding the business (logistics, cloud).
Many sneered "when will it make money," but that revenue growth eventually became a vast moat that came back as enormous profit later. It is a case showing why the "quality" of revenue growth (does it carry through to future profit) matters. That said, remember that not every profitless growth stock becomes Amazon.
Metrics to read alongside
See it in real stocks
Search US stocks on Stocklore to see Revenue and other financial metrics alongside the sector average.
This explanation is for information and reference only and is not a recommendation to buy or sell any security. Investment decisions and their consequences are your own.