Year over year

Year over year compares a figure in the current period to the same period one year earlier. It strips out seasonal effects, since comparing a company's holiday quarter to the prior holiday quarter is far more meaningful than comparing it to the quarter right before it.

It is most commonly used for revenue and earnings growth. A company reporting revenue up 12% year over year means revenue this period was 12% higher than the same period last year, not 12% higher than last quarter.

Growth reported any other way, such as quarter over quarter, can be misleading on its own for businesses with seasonal patterns, since a strong holiday quarter will always look weak compared to the quarter that follows it.