How to Calculate Year-over-Year Growth

A company reports "revenue grew 15%." Grew compared to what, exactly? Year-over-year growth answers that by comparing a period to the same period one year earlier — which matters more than it sounds, because it's specifically designed to cancel out seasonal swings that a simple month-to-month comparison can't.

What YoY growth means

Year-over-year (YoY) growth compares a value in the current period to the value from the equivalent period exactly one year prior — this December to last December, this quarter to the same quarter last year. Comparing to the same season a year back removes predictable seasonal noise (like a retailer's holiday spike) that would distort a comparison to, say, the previous month.

The formula

YoY Growth = ((Current Period − Same Period Last Year) ÷ Same Period Last Year) × 100

This is the same percentage change formula used elsewhere, applied specifically with a 12-months-prior comparison point.

A revenue example

A company's revenue in a given year was $500,000. The following year, it was $575,000.

YoY Growth = (575,000 − 500,000) ÷ 500,000 × 100 = 15%

A traffic example (including a decline)

A website had 80,000 visits in January of one year, and 68,000 visits the following January.

YoY Growth = (68,000 − 80,000) ÷ 80,000 × 100 = −12,000 ÷ 80,000 × 100 = −15%

Negative YoY growth simply means the metric shrank compared to the same period a year earlier — it's calculated with the identical formula, the result is just negative. It's worth investigating rather than dismissing: seasonal comparisons are specifically meant to strip out normal seasonal patterns, so a negative YoY number usually points to a real change (lost customers, a market shift, a discontinued campaign) rather than a predictable seasonal dip.

The zero-baseline problem

YoY growth breaks down mathematically if the prior period was zero. A new product line with $0 in revenue last year and $50,000 this year can't have a meaningful "percent growth," because dividing by zero is undefined — the formula simply doesn't apply. In these cases, it's more accurate to report the raw dollar or unit growth instead of forcing a percentage that doesn't exist.

The negative-baseline problem

A subtler issue comes up when the prior period itself was negative — for example, a business unit that posted a $10,000 loss last year and a $5,000 profit this year. Plugging into the formula:

(5,000 − (−10,000)) ÷ (−10,000) × 100 = 15,000 ÷ −10,000 × 100 = −150%

That's a swing from a loss to a profit — unambiguously good news — but the formula returns a negative percentage, which reads as bad news. This happens because dividing by a negative denominator flips the sign. When the baseline period is negative, a plain percentage figure can be actively misleading, and it's usually clearer to describe the raw dollar swing instead ("moved from a $10,000 loss to a $5,000 profit") rather than quoting a percentage that doesn't intuitively match the story.

Growth percent vs. percentage points

If a growth rate itself is being tracked over time — say, YoY growth was 10% last year and 12% this year — that 2-point difference is a change in percentage points, not a further "20% increase in growth." See percentage points vs. percent for why that distinction matters when comparing growth rates across periods.

YoY vs. month-over-month

Month-over-month (MoM) growth compares consecutive months and reacts faster to recent changes, but it's noisy for anything seasonal — a retailer's November-to-December jump says more about the holidays than the business's real trajectory. YoY smooths that out by comparing like-for-like periods, at the cost of reacting more slowly to genuinely new trends. Many businesses track both: MoM for near-term signals, YoY for a cleaner read on underlying growth. Try both comparisons in our percentage growth calculator.