Run-Rate Revenue
An annualised revenue figure extrapolated from a recent sub-period, used when the business has grown significantly during the historical period.
Also known as: Annualised revenue
One-line definition
Run-rate revenue takes the most recent trading period (e.g. last six months) and annualises it to approximate the forward revenue base.
Why TS cares
When a company has grown rapidly, the last full-year reported revenue understates the current earning power. TS advisers build run-rate adjustments to give buyers a more accurate baseline for valuation.
Watch-outs
Run-rate can be gamed. TS teams stress-test whether recent revenue is truly recurring, whether new contracts are fully signed, and whether seasonality has been properly adjusted.