Year-over-Year (YoY) Revenue Growth measures the percentage change in a company’s revenue from one year to the next. It is a key indicator of the company’s growth trajectory and performance over time.
A positive YoY Revenue Growth indicates that the company’s revenue is increasing, which is generally a sign of healthy business growth. Conversely, a negative YoY Revenue Growth means a decline in revenue, which is a big red flag indicating potential challenges or market changes. Stating the obvious, you want to see positive YoY Revenue Growth for your business, unless you make a strategic decision to downsize.
Year-over-Year Revenue Growth = (Net Revenue in Current Year – Net Revenue in Previous Year) / Net Revenue in Previous Year
So YoY Revenue Growth % indicates by what percentage revenue grows (or shrinks) from the previous year to this year.