Quarter Over Quarter (Q/Q): How to Use Q/Q Analysis in 2025

Quarter over quarter (Q/Q) might sound like finance jargon, but in 2025’s fast-moving market, it’s a vital metric for anyone tracking company growth, economic trends, or their own investments. Whether you’re a small business owner comparing sales, an investor checking ASX earnings, or simply keen to decode the headlines, understanding Q/Q can help you spot real progress—and potential red flags—before the rest of the crowd does.

What Is Quarter Over Quarter (Q/Q) and Why Does It Matter?

Quarter over quarter (Q/Q) refers to the comparison of a financial metric—like revenue, profit, or expenses—from one quarter to the next. For example, you might compare January-March (Q1) results to those from October-December (Q4) the previous year. This gives a short-term view of how a business or market is performing.

• Fast Feedback: Q/Q analysis highlights recent shifts, letting you spot trends or issues before they snowball.
• Seasonal Clarity: For industries with strong seasonal swings (like retail or tourism), Q/Q helps separate real growth from normal cycles.
• Investor Insight: ASX-listed companies now routinely report Q/Q changes in earnings releases, helping investors gauge momentum.

In 2025, as economic volatility and interest rate changes keep markets on edge, Q/Q figures are more relevant than ever. RBA policy updates and the lingering effects of global supply chain shifts mean that a single quarter can tell a very different story than annual averages.

How to Calculate and Interpret Q/Q Growth

Calculating Q/Q growth is straightforward. The formula is:

Q/Q growth (%) = [(Current Quarter Value – Previous Quarter Value) / Previous Quarter Value] × 100

Let’s say your business earned $120,000 in Q1 2025, up from $100,000 in Q4 2024. Your Q/Q growth is:

[(120,000 – 100,000) / 100,000] × 100 = 20%

This means your revenue grew by 20% quarter over quarter. But context matters:

• One-off events: Did a big contract land in Q1, or did Q4 include unusual expenses?
• Seasonality: Was the previous quarter typically slow or busy for your sector?
• Industry trends: Are competitors seeing similar Q/Q changes?

In 2025, many Australian retailers are reporting stronger Q1s as consumer sentiment rebounds post-inflation, but energy companies are seeing volatile Q/Q swings due to ongoing global price uncertainty.

Real-World Q/Q Analysis: 2025 ASX and Economic Trends

Major Australian companies have increasingly emphasised Q/Q figures in their 2025 reporting, responding to shareholder demand for more transparency and real-time performance signals.

• Banking Sector: The big four banks, facing margin pressure from RBA’s rate pause in early 2025, showed only modest Q/Q net interest income growth—prompting analysts to downgrade some outlooks.
• Tech and Startups: Australian tech firms, particularly in fintech, reported double-digit Q/Q revenue growth as digital payment adoption surged, reflecting both sector momentum and the lingering digital shift post-pandemic.
• Property: Q/Q figures for property developers revealed a surprising uptick in apartment pre-sales in Q1 2025, attributed to new federal incentives for first-home buyers and increased migration intake.

On the macroeconomic side, the ABS (Australian Bureau of Statistics) continues to publish Q/Q GDP and employment figures, which are closely watched by policy makers and the RBA. For example, Q1 2025 GDP growth surprised on the upside at 0.8% Q/Q, boosting market confidence and temporarily lifting the AUD.

Using Q/Q for Smarter Decisions in 2025

Whether you’re running a business or managing your own portfolio, here’s how to put Q/Q analysis to work:

• Spot inflection points: A sharp Q/Q change can signal a turning point—positive or negative. Dig deeper to understand what’s driving it.
• Benchmark against peers: Compare your Q/Q growth to industry averages. Falling behind? It might be time to adjust your strategy.
• Combine with other metrics: Q/Q is powerful, but it’s just one lens. Use it alongside year-over-year (Y/Y) and rolling 12-month averages for a fuller picture.
• Watch for volatility: In volatile markets, a single Q/Q result may be noisy. Look for consistent patterns over multiple quarters.

As we move through 2025, keeping an eye on quarter over quarter changes will be essential for navigating Australia’s shifting financial landscape—whether you’re eyeing investment opportunities, running a business, or tracking the broader economy.