Revenue Growth

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Benzinga  5 hrs ago  Comment 
Following Google Inc (NASDAQ: GOOGL) (NASDAQ: GOOG)'s second quarter earnings beat, RBC Capital analyst Mark Mahaney raised his price target on the stock to $750 from $640. Mahaney was on CNBC to weigh in on the earnings and share his outlook for...
guardian.co.uk  8 hrs ago  Comment 
Analysts expect weak organic growth in first half Outsourcing group Capita has slipped back after a downbeat note from analysts at Morgan Stanley. The bank issued an underweight rating, albeit lifting its target price form 950p to 990p, on the...
Wall Street Journal  Jul 16  Comment 
Mexican telecommunications giant América Móvil saw its net profit fall in the second quarter on flat sales as the company faces increased competition and regulatory measures in Mexico that limited revenue growth.
TheStreet.com  Jul 16  Comment 
NEW YORK (TheStreet) -- Google  exceeded expectations on second-quarter earnings, released Thursday. Earnings per share came in at $6.99, beating estimates of $6.74. During the same quarter last year, Google earned $6.08 a share. Revenue...
The Hindu Business Line  Jul 16  Comment 
After a disappointing March quarter, Mindtree put up decent show in the latest June quarter. Its revenue growth of 4.8 per cent (in dollar terms) came in better than market expectation of 4...
The Economic Times  Jul 16  Comment 
In FY15, Zensar reported revenue of Rs 2627.68 crore, implying that the company derived about Rs 331 crore from digital services.
The Economic Times  Jul 16  Comment 
ANG Industries rallied over 9% in intraday trade on Thursday on reports that marquee HNI Vikram Kotak bought stake in the co.
newratings.com  Jul 16  Comment 
DUBLIN (dpa-AFX) - Experian plc (EXPN.L), the global information services company, reported total revenue growth of 3% at constant exchange rates and organic revenue growth of 3% for the three months to 30 June 2015. At actual exchange rates,...




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Revenue Growth is the percent increase (or decrease) in a company's revenue between two or more equivalent fiscal periods

Revenue Growth is used to measure how fast a company's business is expanding. The figure shows the annual rate of increase/decrease in a company's revenue or sales growth. The figures give analysts, investors and participants an idea of how much a company's sales are increasing over time.

While revenue growth tends to fluctuate from fiscal year to fiscal year and fiscal quarter to fiscal quarter, investors look for trends in revenue growth as a means of gauging the company's growth over proscribed periods of time. All other things being equal, a company that is able to continually grow its revenue should see equivalent increases in net income.

Rate of Revenue Growth

Taking the derivative of the revenue growth gives you the rate of revenue growth, which tells you how much the rate of revenue growth is changing. Investors look at this figure to gauge a potential forthcoming change in earnings growth. If a company that has been able to consistently grow its revenues at some pace begins to see smaller revenue growth over one or more fiscal periods, it may be an indicator that the growth itself will continue to decrease over time, or that it has plateaued.

Example

Company ABC generated $100 billion in revenue during its third quarter of 2005 and $120 billion in the fourth quarter that year, the company saw quarterly revenue growth of 20% sequentially.

If Company ABC generated $150 billion in the fourth quarter of 2004, the company would have seen its revenue increase 50% on a year-over-year basis

Revenue Growth Calculation on Wikinvest

Wikinvest calculates revenue growth as the growth of trailing twelve months of revenue. The treatment is different from Yahoo! Finance which calculates quarterly year-over-year growth. The following example will illustrate the difference:

' 2006 2007 2008
Q1$100m$104m$144m
Q2$120m$142m$120m
Q3$130m$140m
Q4$140m$170m

Q2 2008 is the most recent quarter. In this case, Yahoo! Finance would calculate revenue growth as -15.5% [(120-142)/142].

Wikinvest, on the other hand would calculate the growth as 11.2%. This is because wikinvest calculates the growth based on the revenue generated in the last twelve months. In this case, Q3 07, Q4 07, Q1 08 and Q2 08. Specially, it is calculated as:

Revenue growth = ((120+144+170+140)-(142+104+140+130))/(142+104+140+130) = 11.2%

Taking the growth based on trailing twelve months of revenue mitigates undue fluctuations that may affect a single quarter.

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