Quarterly revenue growth is an increase in a company's sales in one quarter compared to sales of a different quarter.
The current quarter's sales figure can be compared on a year-over-year basis (e.g., 3Q sales of Year 1 compared with 3Q sales of Year 2) or sequentially (3Q sales of Year 1 compared with 4Q sales of Year 1). This gives analysts, investors, and additional stakeholders an idea of how much a company's sales are increasing over time.
When looking at a company's quarterly or annual financials, it is not enough to just look at the revenue for the current period. When investing in a company, an investor wants to see it grow or improve over time. Comparing a company's financials from one period to another gives a clear picture of its revenue growth rate and can help investors identify the catalyst for such growth.
For example, say that XYZ Corp. generated $66.2 billion in revenue for the second three months of the year (April to June), and $58.7 billion for the first three months (January to March). Therefore, the company saw quarterly revenue growth of 12.78%.
Source: Investopedia, Quarterly Revenue Growth: Meaning, Example, Limitations, accessed 26 December 2023, <https://www.investopedia.com/terms/q/quarterlyrevenuegrowth.asp>
Comments