YoY (Year over Year)

YoY is "comparing this quarter of this year with the same quarter last year." You set this year's Q3 revenue against last year's Q3 revenue — the comparison is the same point one year ago.

Why compare with a year ago (last year's Q3) rather than the immediately prior quarter (Q2)? Because of seasonality. An ice-cream shop sells a lot in summer and little in winter. Comparing summer (Q2) with autumn (Q3) misleads you into "business got worse," but comparing last autumn with this autumn tells you whether it is real growth. Comparing the same season is fair.

YoY automatically clears away seasonality and shows most cleanly "did this business actually grow or shrink versus a year ago." Almost every number — revenue, profit, EPS — is compared this way.

When the news says "revenue grew 20%," it is almost always on this YoY basis. So knowing YoY gives you the eye to read earnings articles.

Positive YoY is growth versus a year ago, negative is contraction. But do not look at one number alone — look at the "trend": if YoY growth is falling from +30% → +20% → +10%, it is still growing but the pace is cooling (decelerating growth).

Conversely, if the same period last year was unusually bad (a low base), this year's YoY can look strongly positive while it is really just a recovery. You have to look at "how that quarter went last year" too.