Calculate YoY growth for smarter business decisions

Imagine your sales team celebrating a huge jump in revenue for the fourth quarter, only to realise it’s entirely because of holiday season demand.

Numbers can be misleading without context. For example, monthly gains due to seasonality or short-lived market shifts might be perceived as sustained business growth, leading to decisions that haven’t considered the big picture.

That’s why calculating year-on-year (YoY) growth is so important. YoY growth looks beyond temporary trends, revealing true long-term performance and helping with forecasting and strategy. This guide will explain how to calculate it, how to interpret the results, and how to improve your company’s growth trajectory sustainably for the long term.

Year-on-year growth (sometimes referred to as year-over-year growth) shows the percentage change in a given metric from one year to the next. This metric could be revenue, overall profit, website traffic, number of customers, sales volume, or any other figure of your choice.

Businesses regularly use YoY growth to assess their financial performance and determine whether it’s improving, standing still, or worsening over the long term. Think of it as a way to see past short-term fluctuations to truly measure whether your business is making stable progress.

Let’s look at a real-world example: Australian airline Qantas made $19,815M in revenue in 2023 and $21,939M in 2024 . Its revenue increased by $2,124M, which translates to YoY growth of 10.72%, indicating solid, sustainable gains.

There are other ways to monitor performance, such as quarter-on-quarter (QoQ), which tracks change between different business quarters, and month-on-month (MoM), which assesses change from one month to the next.

While they’re useful for shorter-term observations, YoY growth gives a clearer view of the long-term landscape. To clarify, let’s sum up the key differences in a table.

Year-on-year metrics are essential for understanding long-term trends and making big picture decisions. To explain why, let’s take a look at a simple YoY growth chart that shows how revenue can fluctuate throughout a calendar year.

Imagine you’re running a business and want to focus on your revenue growth rate in November. Let’s compare how a month-on-month, quarter-on-quarter, and year-on-year growth analysis would interpret these results:

• MoM: Profitability is lower compared with October, suggesting a decline.
• QoQ: Profitability in Q4 hasn’t reached the same peaks as Q3, suggesting a decline.
• YoY: Profitability increased from November of the previous year, indicating growth.

It would be easy to assume that business is declining if revenue falls sharply in November from the previous month or quarter, but this could be due to fluctuating consumer habits, such as customers saving money for the holiday season.

Because YoY analysis focuses on broader patterns rather than temporary numbers, it gives executives and leaders the ability to:

• Ensure decisions aren’t skewed by fluctuations like holidays or peak sales periods
• Spot long-term trends to see whether strategies are sustainable and effective over time
• Benchmark performance and enable comparisons internally and externally
• Build investor confidence by demonstrating consistent growth, supporting buy-in

All of this leads to better-informed strategic decisions, stronger stakeholder trust, and a clearer path to sustained growth.

Calculating YoY growth is a fairly straightforward process. First, we’ll take a look at the overall YoY growth formula. Then we’ll break it down in more detail.

The formula is:

CYV: Current Year Value

PYV: Previous Year Value

For instance, if sales rose from 500 units in February 2024 (PYV) to 700 units in February 2025 (CYV), we can calculate YoY growth like this:

YoY Growth = ((700 – 500) ÷ 500) x 100 = 40%

And here are the step-by-step instructions, using an example:

For your chosen metric, you’ll need:

• The value for the specified period in the current year
• The value for the same period in the previous year

Let’s say you’re analysing sales figures for June 2025. You should note down the number of sales for June 2025 and for June 2024.

Next, subtract the previous year value (PYV) from the current year value (CYV). If you made 1,000 sales in June 2025 and 800 in June 2024, you’d calculate:

1,000 - 800 = 200 sales

To do this, divide the difference from the previous step by the PYV. So you’d get:

200 ÷ 800 = 0.25

This last step makes the figure easier to interpret. For this, simply multiply the result from the previous step by 100:

0.25 x 100 = 25%

This shows that, between June 2025 and June 2024, your sales increased by 25%.

Calculating YoY growth is only the first step. What really matters is knowing how to turn those numbers into decisions. Different metrics reveal different things about your business performance, ranging from financial strength to team performance and customer satisfaction.

Let’s break down how to read and interpret YoY growth across several key areas:

This YoY measurement shows whether your business is becoming more efficient and financially stable with time. It helps you plan sustainable investments, reassure stakeholders of long-term stability, and develop smart strategies to optimise your cash flow.

Here’s an example of YoY profit growth and how it can influence your actions:

While YoY profit growth tells you how well you’re managing costs and optimising operations, the sales measurement tells you if people actually want what you’re selling. Investors and leaders can use this as a signal of sales efficiency, product-market fit, and market-share movement.

Here’s an example of YoY sales growth trends for a fictional company.

This YoY measurement works particularly well as an indicator of your digital marketing success. It reflects brand visibility and reach, helping executives and marketing teams decide where to invest resources, which channels are delivering results, and whether strategies are working.

Let’s look at an example:

Analysing YoY customer retention can be one of your brand’s strongest signals of trust and loyalty. Use this metric to identify service gaps and test strategies that turn customers into repeat advocates.

While the manual YoY growth formula is a great starting point, the true benefits come when you can automate annual growth rate calculations and visualise trends in real time.

The right tool can save hours of manual work and deliver insights that go beyond a single formula, helping you spot patterns and make faster, more accurate decisions. Let’s go over some of the available options.

For a basic but free option, we can calculate YoY growth in Google Sheets. Here’s the formula:

YoY Growth = (Current Period Revenue / Previous Period Revenue) - 1

To show how this works, let’s assume we have the total revenue for a company over eight consecutive years.

We can now put the formula in column C to calculate YoY growth for 2018.

After hitting enter, we can see that the YoY growth for 2018-2019 is 0.04. We can then drag and fill the rest of the cells in column C to carry out the formula for the remaining years. Convert the numbers to percentages by clicking the “%” icon in the top ribbon.

Google Sheets is ideal for a few quick calculations, but you’ll need more powerful tools for larger businesses.

Great business intelligence (BI) and customer relationship management (CRM) solutions can handle a lot more than just formulas. The best platform will automate all of your data analytics, visualise them in real-time dashboards, and even leverage AI to offer business-ready insights that help you respond faster to new trends.

A good place to start is with a tool like Tableau. Our solution will transform your YoY growth calculations into accessible visualisations, offer guided recommendations to put your insights to use, and turn patterns and trends into actionable strategies, all powered by groundbreaking AI.

For businesses that also want to tie YoY insights directly to customers, Sales Cloud adds another layer by integrating sales data, customer interactions, and forecasts. This puts the numbers into context and ties metrics to team efficiency and revenue opportunities.

It doesn’t happen by itself. Increasing growth requires intentional strategies that balance cost efficiency with customer acquisition and retention. Here are the three main factors that will drive your success, plus tips to maximise the opportunities.

• Acquire new customers: Expanding reach isn’t just about spending more on ads. Customers in 2025 want personalised experiences. Smarter targeting can help you connect with the right audiences on a deeper level, encouraging long-term loyalty and driving a 10% to 15% increase in revenue .
• Increase customer lifetime value (CLV): New customers drive short-term growth, but retention will sustain your success. A seemingly small 5% increase in retention can boost profits by 25% to 95%. Look for upselling and cross-selling opportunities to unlock more value from your base customers. Similarly, loyalty programs can strengthen repeat business and turn customers into brand advocates.
• Improve efficiency - The other side to YoY growth is cost management. Automation is the key here. Research from McKinsey shows that organisations investing in digital process automation achieve up to a 30% reduction in costs. Aim to eliminate repetitive manual tasks across teams, which will save money and free up time and resources that you can invest in growth.

All of these strategies can now be powered by a modern CRM and analytics platform that brings together data and AI to automate repetitive tasks, deliver tailored insights to support personalisation, and equip teams with real-time visibility for faster decision-making.

As one example, Spotify used Salesforce’s suite of tools to transform manual sales processes into automated workflows powered by data. This resulted in a 19% YoY increase in advertising revenue, along with a 40% boost in sales productivity and more personalised campaign delivery for advertisers. This shows just how powerful unifying data, operations, and customer engagement can be when it comes to driving sustained YoY growth.

Year-on-year growth is the best way to get a window into your business’s long-term health. By applying the formula in this guide (or working within your CRM to automate the process), you can look beyond seasonal spikes to get real insights into profit, sales, traffic, customer retention and, ultimately, your progress as a business.

While you can calculate YoY growth manually, the real benefit comes when you automate it and use the results to power smarter decisions and stronger strategies.

With Salesforce, you can calculate, visualise, and act on YoY growth data, all in one place. Real-time dashboards, automated processes, AI-driven insights, and predictive forecasting can help you transform raw business data into growth strategies that scale alongside your organisation. Try our CRM solution for free today to see what’s possible.