YoY (Year-over-Year) – Definition & Meaning

YoY (year-over-year) compares a metric in one period to the same period one year earlier to show true growth or decline while minimizing seasonality effects.

Key Takeaways

• In one sentence: YoY measures how a value has changed versus the same period last year.
• Why it matters: Controls for seasonality and calendar effects, revealing underlying trends.
• Context/usage: Common for revenue, EPS, CPI inflation, user growth, and macro data.
• Watchouts: Negative or tiny base values can distort YoY percentages; context is crucial.

What Is YoY?

YoY is a comparative growth rate that evaluates performance by matching like-for-like periods (e.g., Q2 this year vs. Q2 last year). By aligning the calendar, YoY avoids seasonal noise (holidays, weather, sales cycles) that can obscure month-to-month or quarter-to-quarter changes.

How YoY Works

A YoY rate expresses the change as a percentage of last year’s value. Use matching periods (month vs. same month, quarter vs. same quarter, or trailing-twelve-months vs. prior TTM).

YoY % = (Current Period Value − Prior-Year Same Period Value) ÷ |Prior-Year Same Period Value| × 100%

Example of YoY Calculation

If a company reports Q2 revenue of $120m versus $100m in Q2 last year:

YoY % = (120 − 100) ÷ 100 × 100% = 20%

If last year’s value was negative or near zero, the YoY percentage can be misleadingly large or undefined-consider absolute changes and additional metrics.

Benefits and Considerations

• Benefits: Seasonality-aware; easy to interpret; widely used by markets and media.
• Considerations:
  • Base effects: Unusually low/high prior values can skew YoY.
  • Volatility: Early-stage firms or cyclical sectors may show noisy YoY swings.
  • Comparability: Ensure accounting policies and reporting scope are consistent across periods.
  • Supplementary views: Pair with QoQ/MoM, CAGR, and TTM to round out the picture.

Related Terms

• QoQ (Quarter-over-Quarter) – short-term momentum between adjacent quarters.
• CAGR – smoothed multi-period annual growth rate.
• TTM (Trailing Twelve Months) – last 12 months of results, often used with YoY.
• Seasonality – recurring calendar patterns affecting results.