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Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →Clear out junk files and repair common Windows errorsFree Scan →When a shareholder letter says revenue grew, first identify the metric and the periods being compared. Year-over-year growth compares a period with the same period one year earlier; sequential growth compares it with the immediately preceding period. Then verify the amounts, reporting basis, and management’s explanation in the company’s Form 10-Q or 10-K.
Start by identifying what the growth claim measures
A shareholder letter may discuss several figures that sound like growth but do not mean the same thing. Before interpreting a percentage, note whether it refers to consolidated revenue, a business segment, customer count, annual recurring revenue (ARR), bookings, or an adjusted measure. Record the fiscal quarter or year and any geography or currency basis the company specifies.
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Revenue is the amount recognized under the company’s accounting policies. ARR and similar operating measures are company-defined metrics and are not automatically recognized revenue. PTC, for example, says its ARR measure should be considered independently of recognized and unearned revenue. See the PTC Form 10-Q.
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Know which period the growth rate compares
| Term | Comparison | Question it answers |
|---|---|---|
| Year-over-year (YoY) | The stated period versus the corresponding period one year earlier | How does this quarter or year compare with the same seasonal point last year? |
| Sequential or quarter-over-quarter (QoQ) | The stated period versus the immediately preceding quarter | How did the result change from the last quarter? |
These rates can move in different directions because their baselines differ. In its Q1 2025 shareholder letter, ZipRecruiter reported revenue of $110.1 million, down 10% year-over-year and down 1% quarter-over-quarter. It attributed the annual decrease primarily to continued softness in hiring demand and discussed the sequential decline in relation to hiring seasonality. Those are company-reported results and explanations for that specific quarter, not current or general market statistics. The Q1 2025 letter also reports paid-employer counts, revenue per paid employer, gross profit, and gross margin as separate measures.
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Put sequential growth in seasonal context
A sequential increase or decrease is not automatically a change in the underlying business trend. Many companies have seasonal patterns: demand, customer activity, billing, or product usage may rise and fall at predictable points in the year. Compare the quarter with earlier instances of the same quarter when those figures are available, and read the company’s explanation without treating it as independently proven.
Etsy’s Form 10-K says, “We believe that it is generally more meaningful to compare year-over-year results than sequential quarter-over-quarter results.” That statement concerns Etsy’s discussion of its own sequential revenue and gross merchandise sales (GMS) history; it is not a universal rule for every company. See Etsy’s Form 10-K.
Verify the headline in the company’s filing
Use the letter to locate the claim, then check the filing for the same fiscal period. A company’s investor-relations archive may place the letter alongside its earnings release and Form 10-Q or 10-K. The ZipRecruiter SEC filings archive is one example. SEC company filings can also be found through EDGAR company search.
- Find the matching period. Confirm the fiscal quarter or year and the dates covered; fiscal periods do not always align with calendar quarters.
- Check the revenue line and amounts. Compare the current and prior-period figures in the filing. If the letter gives only a rate or rounds the figures, calculate the change from reported amounts and allow for rounding.
- Read the related discussion and notes. Review management’s discussion and analysis (MD&A), revenue-recognition notes, and segment disclosures relevant to the claim.
- Match the reporting basis. Check whether the claim is consolidated or segment-level, reported currency or constant currency, and whether acquisitions, divestitures, or accounting presentation changed the comparison.
- Check metric definitions and reconciliations. If the claim uses a company-defined operating metric or a non-GAAP measure, read its definition and any reconciliation to the closest GAAP measure.
Separate reported results from management’s explanation
The revenue amount and percentage are reported results; statements about why they changed are management’s explanations. A letter may cite demand, pricing, customer mix, acquisitions, foreign exchange, or seasonality. Attribute those causes to the company unless other evidence independently supports them.
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Supporting indicators can help describe the result, but they answer different questions. Customer counts and revenue per customer may illuminate volume or mix; gross profit and margin show profitability rather than total revenue. ZipRecruiter’s Q1 2025 letter presents these indicators separately, so they should not be substituted for its revenue figure.
Treat non-GAAP results as supplemental
When a letter highlights an adjusted figure, find the closest GAAP comparator, the items excluded, and the reconciliation. PTC’s Form 10-Q illustrates this approach by identifying comparable GAAP measures, listing exclusions, and presenting reconciliations. PTC cautions that some excluded items may recur or materially affect reported results, and says non-GAAP measures should be considered in addition to—not as a substitute for or superior to—GAAP results. A reconciliation explains the arithmetic; it does not make the adjusted figure equivalent to revenue or GAAP earnings.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Compare growth claims on the same basis
When weighing two claims—whether from different periods or companies—check the same dimensions for each:
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1Repair Windows errors before they cause bigger problems2Scan for outdated or missing drivers - takes under a minute3Clear out junk files and repair common Windows errors- Year-over-year or sequential comparison, and the fiscal dates covered.
- Reported dollar amounts as well as the percentage change.
- Consolidated revenue, segment revenue, or another operating metric.
- Reported-currency or constant-currency basis, if applicable.
- GAAP or adjusted measure, including its definition and reconciliation.
- Seasonality, changes in presentation, and management’s stated drivers.
- Relevant customer, mix, gross-profit, or margin indicators—and what each does and does not measure.
There is no universal standard in these examples that makes one issuer’s growth figure directly comparable with another’s. Each company’s definitions and reporting basis must be checked on their own terms.
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State the conclusion precisely
A clear summary names the metric, amount or rate, period, and comparison—for example, “consolidated revenue fell year-over-year in the fiscal first quarter.” Add management’s explanation as an attributed statement, and identify material context such as seasonality, currency basis, or an adjustment. For an investment decision, this reading guide is not an assessment of a company’s merits; use the latest filing for the company and period in question.
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