Revenue and earnings growth: year on year and CAGR

Growth is one of the first things investors ask about a company: are sales and profits rising, and how fast? The answer depends on how you measure it. A single strong year can look impressive and mean little, while a steady rise over five years says much more. This guide explains the two standard measures, year-on-year growth and the compound annual growth rate (CAGR), shows how to calculate them from Uzbek company reports, and lists the traps that make growth figures misleading.

Where the numbers come from

For companies that report under the national accounting standards (NSBU, in Uzbek BHMS), revenue is line 010 (net revenue from sales) and net profit is line 270 of the report on financial results, known as Form 2. The form is set by the Regulation on the deadlines, structure and content of financial statements, registration No. 3567, in force since 1 January 2025 (lex.uz, as of 26 September 2026). Each annual report also shows the previous year's figures in a separate column, so even a single report gives you one year of growth. For longer periods, collect the annual reports for each year, which are published on openinfo.uz.

Always compare full years with full years. A quarterly figure compared with an annual one, or a nine-month figure compared with a full year, produces meaningless growth.

Year-on-year growth

The basic formula is:

• Growth = (this year − last year) ÷ last year × 100%

If revenue rose from 81 billion soʻm to 89.1 billion soʻm, growth is (89.1 − 81) ÷ 81 = 10%.

The formula needs a positive base. If last year's net profit was zero or a loss, a percentage change has no meaning: going from a loss of 2 billion to a profit of 3 billion is not a growth of minus 250%. In that case describe the change in words and soʻm instead of a percentage.

CAGR: growth over several years

Year-on-year rates jump around. To summarise growth over a longer period, use the compound annual growth rate:

• CAGR = (end value ÷ start value)^(1 ÷ number of years) − 1

The number of years is the number of steps between the first and last year. From FY2019 to FY2024 is five years, not six.

A worked example

A hypothetical company's net revenue, in billions of soʻm. The numbers are illustrative only.

• FY2019: 60.0
• FY2020: 72.0 (+20%)
• FY2021: 64.8 (−10%)
• FY2022: 81.0 (+25%)
• FY2023: 89.1 (+10%)
• FY2024: 100.0 (about +12.2%)

CAGR from FY2019 to FY2024 = (100 ÷ 60)^(1 ÷ 5) − 1 = 1.667^0.2 − 1 = about 10.8% a year.

Now compare that with the simple average of the five yearly rates: (20 − 10 + 25 + 10 + 12.2) ÷ 5 = about 11.4%. The simple average overstates growth, because a fall followed by a rise of the same percentage does not bring you back to where you started. CAGR is the steady rate that would have taken the company from 60 to 100 in five years, which is why it is the better summary. It works the same way as the compounding described in our guide to compound interest.

Growth in earnings per share

For a shareholder, growth in net profit is not quite the same as growth in their share of it. If a company issues new shares, profit is divided among more shares, so earnings per share can grow more slowly than net profit or even fall.

Take a hypothetical company whose net profit rises from 8 billion to 10 billion soʻm, up 25%, while its shares increase from 80 million to 100 million after a new issue. Earnings per share go from 100 soʻm to 100 soʻm: no growth at all for existing shareholders. Always check the share count when you compare earnings per share across years.

Common traps

• The choice of base year. CAGR depends heavily on the start and end points. Starting from a weak year makes growth look fast, starting from a peak makes it look slow. Try more than one period.
• Losses and tiny profits. CAGR cannot be calculated when the start value is zero or negative, and a very small start value produces a huge rate that means little.
• One-offs. A large exchange gain or asset sale in the final year lifts profit growth without any improvement in the business. Check the finance and extraordinary lines of Form 2, as explained in our income statement guide.
• Inflation. Revenue and profit are in soʻm. If prices in the economy rose by, say, a hypothetical 10% a year, a company growing revenue at 10.8% a year has barely grown in real terms: (1.108 ÷ 1.10) − 1 = about 0.7%. Our guide to inflation and your savings explains the difference between nominal and real growth.
• Mergers and restructuring. If a company absorbed another business, revenue jumps without organic growth. Read the essential facts on reorganisation before trusting a sudden rise.
• Fiscal year labels. Make sure each figure belongs to the fiscal year you think it does. Compare the reporting year stated in the report with the year you are using.

Growth and valuation

Growth matters because it changes what a share is worth. A company whose profit grows steadily can justify a higher P/E ratio than one whose profit is flat, but only if the growth is likely to continue. Profitability matters too: growth that requires heavy borrowing or large new share issues adds less value for existing shareholders than growth funded by the company's own profit. Read growth together with ROE and ROA and debt.

Where Finmind helps

The public stocks pages, for example Kvarts (KVTS), chart revenue, net income and earnings per share by fiscal year for up to the last ten years, together with year-on-year revenue growth. When a year has no reported prior year, or the prior year's figure is not positive, the page gives that reason instead of a growth rate. Every chart names its period, the as-of date and the source: openinfo.uz annual filings (NSBU Form 1 and Form 2). The public stock page does not print a CAGR, but its yearly values are what you need to calculate one with the formula above.

This article is for education only and is not investment advice. Investing in securities involves risk, including the loss of money you invest.