Run-Rate Revenue
Formula
Current Period Revenue × Periods per Year
Definition
Run-Rate Revenue annualizes the revenue generated in a current period to estimate the annual revenue implied by the company's current revenue pace.
For monthly data, current-period revenue is multiplied by 12; for quarterly data, it is multiplied by 4. Unlike trailing-twelve-month revenue, Run-Rate Revenue reflects the current period rather than revenue actually generated over the preceding year.
Interpretation
Run-Rate Revenue provides a current view of company scale and can be particularly useful when revenue is growing or declining quickly.
Because it annualizes a single period, it can be distorted by seasonality, unusual transactions, or other temporary changes. It should therefore be interpreted as an annualized snapshot rather than a forecast.
In MetricFrame
MetricFrame calculates Run-Rate Revenue by multiplying the current period revenue by 12 for monthly data or 4 for quarterly data.