Revenue run rate is the annualized figure of a company's current revenue in a specified time period (week, month, quarter, etc.) and is frequently used to measure a business' financial performance, especially fast-growing companies or startups. Since the run rate is calculated using the current financial data, it assumes that the present financial environment will probably remain unchanged or with little change in the near future.
The formula for calculating the revenue run rate is as follows:
Run Rate = Revenue in Period / # of Days in Period x 365
Revenue run rate can be used as a benchmark to compare a company's performance after making major changes to operational structure and management.