Why year over year (YoY) matters to a first-time founder
Comparing equivalent periods reduces the distraction caused by seasonal peaks and troughs. It helps a founder see whether revenue, costs or users are genuinely growing relative to last year. The result still needs context because prices, acquisitions, product changes or an unusually weak base can distort the comparison.
Examples of year over year (YoY)
Monthly revenue rises from ₦80 million in September 2025 to ₦100 million in September 2026. YoY growth is 25%: the ₦20 million increase divided by ₦80 million. Comparing September with August could instead reflect normal seasonality, so the founder also reviews several months and the reasons behind the change.
Common misunderstanding
It does not mean the same as growth during the year or an annualised monthly rate. A September YoY comparison uses September one year earlier, not January. Percentage change is also undefined when the earlier value is zero, so report the absolute change and explain the base instead.
When to use it
Use it for recurring metrics with at least a year of comparable history, especially seasonal businesses. State the periods, units and whether figures are nominal, constant-currency or adjusted. Pair it with month-on-month or quarter-on-quarter views when recent momentum matters, and explain structural breaks rather than hiding them.