Revenue Run Rate 

A Revenue Run Rate is a financial metric used to estimate the company’s future revenue based on current financial performance. It extrapolates the current period’s revenue (typically monthly or quarterly) over a longer timeframe (usually a year) to project annualized revenue figures. 

Formula: Revenue Run Rate = Revenue in Period × Number of Periods in a Year    For example, if a company earns AED 500,000 in a month, its annual run rate would be AED 500,000 × 12 = AED 6,000,000. Run rates are particularly useful for: 

  • Fast-growing startups lacking extensive historical data. 

  • SaaS businesses with recurring revenue models. 

  • Evaluating growth momentum during early fundraising rounds. 

However, it’s important to note that run rates can overstate revenue if they ignore seasonality, churn, or one-time transactions.