YoY (year-over-year)
A way of comparing this period with the same period a year earlier — the most basic comparison basis for seeing real growth with seasonal effects stripped out.
YoY change = (this period's value − same period last year) ÷ same period last year × 100
A positive YoY means growth versus a year ago; a negative one means a decline.
In plain terms
YoY means "comparing this quarter of this year with the same quarter last year." For example, you line up this year's Q3 revenue against last year's Q3 revenue. The comparison point is the same time one year earlier.
Why compare with a year ago (last year's Q3) instead of the quarter right before (Q2)? Because of seasons. An ice cream shop sells a lot in summer and little in winter. If you compare summer (Q2) with autumn (Q3), you might mistakenly think "business got worse," but comparing last autumn with this autumn shows whether there was real growth. Comparing the same season with the same season is fair.
What it tells you
YoY automatically strips out seasonal effects, so it shows most cleanly whether "this business actually got bigger or smaller than a year ago." Almost every number — revenue, profit, EPS — is compared this way.
When the news says "revenue rose 20%," it is almost always on this YoY basis. So knowing YoY gives you an eye for reading earnings articles.
Formula
YoY change = (this period's value − same period last year) ÷ same period last year × 100
What high or low means
A positive YoY means growth versus a year ago; a negative one means a decline. But a single quarter's number and the "trend" say different things — if YoY growth goes +30% → +20% → +10%, the company is still growing, yet the pace is cooling (slowing growth).
Conversely, if the same period last year was unusually bad (a low base), this year's YoY may look strongly positive while in reality it is only a recovery. "How that quarter went last year" determines what the number means.
YoY depends heavily on "that point one year ago (the base)." If there was a large one-off sale in the same quarter last year, this year's YoY looks worse than reality; if last year was a bottom, this year looks exaggeratedly good. This is called the base effect.
Looking at YoY for just one quarter leaves you swayed by chance fluctuations. Lining up YoY for several quarters and reading the trend (accelerating/slowing) is more accurate.
Because YoY compares at "one-year intervals," shorter-term recent changes (for example, a trend that only began to turn in the last quarter) show up late. For more recent movement, supplement it with quarter-over-quarter (QoQ).
Metrics to read alongside
See it in real stocks
Search US stocks on Stocklore to see SEC-filing-based financial metrics 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.