Revenue Growth Formula: MoM, QoQ and YoY Examples

Revenue growth measures how much sales revenue changed from one period to another. It is one of the simplest ways to track whether a business is expanding, flat, or contracting over time.

The standard formula is:

Revenue growth = ((Current revenue − Previous revenue) ÷ Previous revenue) × 100

For example, if revenue rises from $100,000 to $120,000, revenue growth is 20%.

Use the Revenue Growth Calculator when you want to compare two periods instantly.

Revenue growth formula

You need two values measured consistently:

• Previous revenue: the earlier period and the baseline.
• Current revenue: the later period you are comparing with the baseline.

Then:

1. Subtract previous revenue from current revenue.
2. Divide the change by previous revenue.
3. Multiply by 100.

Formula:

((Current revenue − Previous revenue) ÷ Previous revenue) × 100

A positive result indicates growth. A negative result indicates a revenue decline.

Worked example

Suppose a company reports:

• Previous-quarter revenue: $800,000
• Current-quarter revenue: $920,000

The change is:

920,000 − 800,000 = 120,000

Divide by the previous revenue:

120,000 ÷ 800,000 = 0.15

Convert to a percentage:

0.15 × 100 = 15%

Revenue grew by 15% quarter over quarter.

Month-over-month revenue growth

Month-over-month, or MoM, growth compares one month with the immediately preceding month.

If August revenue is $52,000 and September revenue is $57,200:

((57,200 − 52,000) ÷ 52,000) × 100 = 10%

September revenue grew 10% MoM.

MoM growth is useful for short-term monitoring, but it can be noisy. A single campaign, billing cycle, holiday, or large customer can materially affect one month.

Quarter-over-quarter revenue growth

Quarter-over-quarter, or QoQ, growth compares a quarter with the previous quarter.

For example:

• Q1 revenue: $300,000
• Q2 revenue: $330,000

((330,000 − 300,000) ÷ 300,000) × 100 = 10%

Q2 revenue grew 10% QoQ.

Quarterly comparisons can smooth some of the volatility seen in monthly data while still showing relatively recent changes.

Year-over-year revenue growth

Year-over-year, or YoY, growth compares a period with the same period one year earlier. This is often useful for businesses with seasonality.

If September this year produces $150,000 in revenue and September last year produced $125,000:

((150,000 − 125,000) ÷ 125,000) × 100 = 20%

Revenue grew 20% YoY.

For a seasonal business, comparing December with November may say more about the calendar than the underlying business. Comparing December with the prior December can provide a more meaningful baseline.

MoM vs QoQ vs YoY

No single comparison period is always best.

Use MoM when

• you need a fast operating signal;
• the business has relatively stable monthly seasonality;
• you are monitoring a recent launch or campaign.

Use QoQ when

• monthly results are too volatile;
• management plans and reports by quarter;
• you want a medium-term trend.

Use YoY when

• seasonality is significant;
• you want to compare similar calendar periods;
• you are evaluating annual progress.

A useful dashboard often shows more than one of these views rather than relying on a single growth number.

Revenue growth vs profit growth

Revenue and profit are not the same metric.

Revenue measures sales before subtracting the costs included in a profit definition. A company can grow revenue while profit falls if costs rise faster than sales.

For example:

• Revenue grows from $1.0 million to $1.2 million: 20% revenue growth.
• Costs grow from $800,000 to $1.05 million.
• Profit falls from $200,000 to $150,000.

Revenue increased, but profit declined.

Use the Profit Margin Calculator alongside revenue growth when you want to understand whether higher sales are also translating into better economics.

Revenue growth vs percentage increase

Mathematically, revenue growth is a percentage-change calculation applied specifically to revenue. The same baseline rule applies: divide the change by the earlier value.

The Percentage Increase Calculator is useful for general before-and-after values, while the revenue growth tool gives the calculation business context.

What if previous revenue is zero?

The standard growth-rate formula is undefined when previous revenue is zero because the calculation divides by the baseline.

If a business moves from $0 to $10,000 in revenue, saying that revenue increased by a conventional percentage is not mathematically meaningful. Report the absolute increase instead, or describe the business as moving from no revenue to $10,000 for the period.

What if revenue falls?

The same formula can return a negative result.

If revenue falls from $200,000 to $170,000:

((170,000 − 200,000) ÷ 200,000) × 100 = -15%

Revenue growth is −15%, which means revenue declined 15%.

For a decline-only presentation, the Percentage Decrease Calculator can express the size of the drop as a positive decrease percentage.

Common revenue growth mistakes

Comparing inconsistent periods

Do not compare one month with one quarter without normalizing the periods. Both numbers should represent equivalent time spans or a clearly defined analytical comparison.

Mixing gross and net revenue definitions

If one period uses gross sales and another uses revenue after returns or discounts, the growth result is not comparable. Keep the accounting definition consistent.

Ignoring acquisitions or discontinued operations

Large structural changes can make headline growth difficult to interpret. When relevant, separate organic changes from changes caused by acquisitions, disposals, or major reporting-scope changes.

Treating growth as profitability

Fast revenue growth does not automatically mean healthy margins or positive cash flow. Pair growth with profitability and unit-economics metrics when making decisions.

FAQ

What is a good revenue growth rate?

There is no universal target. A useful benchmark depends on company size, industry, business model, maturity, pricing, and market conditions. Compare growth with your own history, plan, and relevant peers rather than using a single generic threshold.

Can revenue growth be negative?

Yes. A negative growth rate means current-period revenue is below the previous-period baseline.

Should I use monthly or annual revenue growth?

Use the period that matches the decision you are making. Monthly growth is faster but noisier; annual or year-over-year comparisons are often better for long-term trends and seasonal businesses.

Does revenue growth include inflation?

The basic formula uses nominal reported revenue. If inflation materially affects your analysis, you may need a separate inflation-adjusted view.

Calculate revenue growth

Enter previous and current revenue in the Revenue Growth Calculator to calculate the percentage change, then compare MoM, QoQ, or YoY periods using a consistent definition.