Revenue Growth
How many % revenue this period rose versus the same period a year ago — how fast the company is growing in size.
Revenue growth = (this quarter's revenue − year-ago quarter's revenue) ÷ year-ago quarter's revenue × 100
A high revenue growth rate means the business is growing in size quickly.
In plain terms
If a company sold $10 billion in the same quarter last year and $12 billion in the same quarter this year, revenue rose 20%. That 20% is the revenue growth rate.
Why compare with "the same quarter a year ago" instead of "the previous quarter"? Because many businesses are seasonal (selling more in winter, for example). Comparing like seasons is fairer. This kind of comparison is called YoY (year-over-year).
What it tells you
Revenue growth shows most directly whether a company is expanding its place in the market or has stalled. Revenue usually moves before earnings do, so it is read as an early signal of growth.
Especially for growth companies whose earnings are still small, there is little to compare on the earnings side, so the differences show up in how fast and how steadily revenue grows.
Formula
Revenue growth = (this quarter's revenue − year-ago quarter's revenue) ÷ year-ago quarter's revenue × 100
What high or low means
A high revenue growth rate means the business is growing in size quickly. However, as a company gets bigger, the basis of comparison (last year's revenue) gets bigger too, so growth rates often slow naturally over time.
For that reason, a single quarter's figure doesn't reveal whether growth is accelerating or slowing.
Even if revenue grows, whether it turns into profit and cash is a separate matter. Many companies accept losses just to grow revenue, so revenue growth needs to be read alongside net margin and FCF to tell whether it is growth that actually leaves something behind (Stocklore's context reading points out the "growth without cash" pattern).
Growth that comes from buying other companies (acquisitions) and growth the core business generates on its own (organic growth) are different in quality. When revenue jumps suddenly, acquisition effects may be mixed in.
A large one-time contract or a temporary price increase can make a single quarter spike, so the real growth trend only shows up across several quarters.
For about 20 years after its 1997 listing, Amazon's revenue grew explosively while it produced almost no profit. Instead of keeping earnings, founder Jeff Bezos poured the money back into expanding the business (logistics and cloud).
Many people mocked it, asking "when will it ever make money," but that revenue growth eventually became a huge moat and came back as enormous profits later on. It is a case that shows what the "quality" of revenue growth (whether it leads to future profit) can decide. That said, not every profitless growth stock followed this path.
Metrics to read alongside
Guides that cover this term
See it in real stocks
Search US stocks on Stocklore to see Revenue alongside the sector benchmark.
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.