An annualised revenue projection based on the most recent period's performance — current monthly or quarterly revenue multiplied to produce a full-year estimate.
Deeper Explanation
Run rate is useful for rapidly growing businesses where historical annual revenue understates current momentum. A business with $10 million of quarterly revenue has a $40 million run rate — even if its trailing twelve months revenue was $28 million. Run rate is not the same as guidance and should not be treated as a forecast: it assumes the current period's performance continues unchanged, which is optimistic for seasonal businesses or those growing rapidly. Investors should compare management guidance, analyst estimates, and the run rate triangulation to assess which is most informative for a given business.
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