Organic Growth

How fast does the business grow on its own, after removing sales it bought through acquisitions, sales it lost by selling divisions, and swings in exchange rates? This is the truest measure of whether the core business is expanding.

The growth number that wasn't

In the summer of 2015, Valeant Pharmaceuticals was one of the most admired stocks in the world. Its revenue had grown almost tenfold since 2010, almost entirely by buying other drug companies: $26.4 billion of acquisitions in about five years.[^1] Growth like that raises an obvious worry. Is anything underneath growing, or is the company just stacking up purchases? Valeant had an answer, and it reported it every quarter: "same store organic growth", the growth of businesses it had owned for at least a year. In the United States, that number came in at double digits for five quarters in a row, from the third quarter of 2014 to the third quarter of 2015.[^2]

It was the right question. Valeant's answer was not what it seemed.

The first problem was a diabetes drug called Glumetza. Valeant got it on April 1, 2015, when it bought Salix Pharmaceuticals. It first planned to raise Glumetza's price by 50%. On June 3, management approved a 500% increase instead. A clause in Valeant's contracts with drug wholesalers meant that a price rise also earned it a credit on the boxes the wholesalers already had on their shelves, so the increase produced about $110 million of revenue at once. Valeant's usual practice was to book such credits to the drug whose price went up. This time it spread the money across 106 other products, including $85 million to businesses it had owned for more than a year. That moved revenue from a brand-new acquisition into the "organic" bucket. Valeant reported 19% same store organic growth for the second quarter of 2015. Without that $85 million, it would have been 14%. In the same presentation, Glumetza appeared as the company's 18th-largest product, with $26 million of sales. Booked the normal way, it would have been number two, at $136 million.[^2]

The second problem was a pharmacy. In 2013, Valeant helped set up Philidor, a mail-order pharmacy, with a $2 million advance, and helped build its systems and hire its key staff. About 95% of what Philidor dispensed was Valeant drugs. In December 2014, Valeant paid $100 million for an option to buy it. Five days before that deal closed, Valeant raised the size above which it named deals in its annual report, so Philidor went unnamed.[^2] As Valeant's sales to Philidor grew, so did their share of its U.S. organic growth, from about 5 percentage points to more than 14. In the third quarter of 2015, Valeant reported U.S. organic growth of 22%. Without Philidor, the figure was a little over 7%.[^2]

The story came apart in October 2015. On October 19, an investigative website first described the ties between Valeant and Philidor. The next day, the short-seller Citron Research accused Valeant of accounting fraud. Within three days the shares had fallen 30%, and on October 30 Valeant cut its ties with Philidor.[^3] The shares had peaked at about $262 in August 2015. In March 2016, after Valeant cut its revenue forecast for the year by about 12%, they closed just under $27, a fall of about 90%.[^3] Valeant restated its 2014 revenue down by about $58 million. In a 2020 settlement, the U.S. Securities and Exchange Commission (SEC) found its disclosures about these measures misleading, and the company paid a $45 million penalty.[^2]

The lesson has two sides. Organic growth really is the number that shows whether the core business is expanding, and investors were right to ask for it. But it is only as honest as its definition, and the company writes the definition. This chapter explains how to measure organic growth, why it matters, and how to check it rather than take it on trust.

What organic growth is

Organic growth is the growth a company produces from the businesses it already had, by selling more or charging more. Think of a pizza owner with three shops who buys a fourth. Total sales jump by about a third overnight. But the question that tells you whether the business is healthy is whether the original three shops are selling more pizza than last year.

Organic growth leaves out three things that move the headline revenue figure without saying anything about the core business:

• Acquisitions. Buying another company adds its sales overnight. That growth was bought, not earned, and is called inorganic growth.
• Divestitures. Selling a division makes revenue drop, even if every remaining business is doing well.
• Currency translation. A U.S. company selling in Europe earns euros but reports in dollars. If the euro weakens, the same euros convert into fewer dollars, and reported revenue falls even though customers bought just as much. Growth with this effect removed is called constant-currency growth.

Companies use different labels: "organic sales", "underlying sales growth", "core growth", or, for shops and restaurants, "comparable-store sales" or "identical sales". Organic growth sits underneath Revenue Growth, which looks at the headline number.

How to measure it

The cleanest method compares like with like: the same businesses, at the same exchange rates, in both years.

Organic growth = (This year's revenue − Revenue from businesses acquired + Revenue lost to currency) ÷ (Last year's revenue − Revenue from businesses since sold) − 1

Imagine a lemonade company. Last year it had $110,000 in sales, including $10,000 from a cookie stand it has since sold. This year it reports $124,000, including $25,000 from a juice bar it bought. A weaker Canadian dollar cut its reported sales by $5,000.

• Reported growth: ($124,000 − $110,000) ÷ $110,000 = 12.7%.
• Comparable base: $110,000 − $10,000 = $100,000.
• Comparable this year: $124,000 − $25,000 + $5,000 = $104,000.
• Organic growth: $104,000 ÷ $100,000 − 1 = 4%.

The headline says 13%. The lemonade business itself grew 4%. Companies usually show this as a bridge:

Reported growth ≈ Organic growth + Acquisitions − Divestitures ± Currency

How currency is removed. Most companies recalculate this year's sales at last year's exchange rates. Suppose a shop in Paris sells €10,000 of lemonade in both years. Last year a euro bought $1.10; this year it buys $1.00. Reported sales fall from $11,000 to $10,000, a drop of 9%. At constant currency, growth is zero, which is the truth about the Paris shop. The SEC staff treats constant-currency figures as non-GAAP measures and expects companies to explain how they calculate them.[^4]

The anniversary rule. An acquired business usually counts as inorganic for its first twelve months, then joins the organic number. When a deal closes partway through a year, this works month by month. Suppose instead the juice bar had been bought on July 1 of last year. Last year's figures include six months of juice sales, $10,000. This year, the January to June sales of $12,000 are still inside the first twelve months of ownership, so they are inorganic. The July to December sales of $13,000 are compared with the $10,000 from the same months last year, and that 30% growth now counts as organic. A fast-growing purchase can lift the organic rate as soon as its anniversary passes.

Finally, organic growth is a non-GAAP measure. GAAP, the official accounting rules, does not define it, so each company writes its own definition. U.S. rules require a reconciliation to reported revenue whenever a company publishes it.[^5] That reconciliation is where you check the definition.

Why it matters

Organic growth separates two ways of getting bigger: winning customers and buying them. Buying matters a lot. McKinsey consultants Mehrdad Baghai, Sven Smit and Patrick Viguerie broke down the growth of more than 200 large companies into three sources: growth of the markets they sell in, acquisitions, and changes in market share. The first two explained nearly 80% of the differences in growth between companies. Market share explained only about 20%.[^6]

Their averages are striking. The typical large company in the study grew revenue 8.6% a year from 1999 to 2005. Of that, 5.5 percentage points came from growth in the markets it sold in, 3.0 points from acquisitions, and just 0.1 point from gaining market share. Market share mattered much more only in high technology, where it explained 37% of the differences, against 14% to 23% in seven of the eight industries studied.[^6] Headline growth mixes a company's luck (the markets it sells in), its spending (the deals it does), and its skill (winning share). Taking out the deals is the first step in telling them apart.

The two kinds of growth are not worth the same. A McKinsey study of 550 large U.S. and European companies over 15 years sorted them into thirds by revenue growth, then by how much their goodwill and other intangible assets grew, a rough sign of how much growth was bought. At every level of revenue growth, companies whose growth was more organic earned higher shareholder returns than those relying more on acquisitions. The main reason is cost: a buyer usually pays the target's full value plus a takeover premium, so it earns a lower return on the money invested.[^7] The authors note one limit: companies that try to grow organically and fail drop out of the high-organic-growth group, which flatters it.[^7]

Academic work agrees. Sara Moeller, Frederik Schlingemann and René Stulz found that shareholders of acquiring companies lost about 12 cents per dollar spent on acquisitions announced from 1998 to 2001, a total of $240 billion. In the whole of the 1980s, the loss had been $7 billion, or 1.6 cents per dollar.[^8] A study of three large European insurers, AXA, Generali and ING, from 1995 to 2005, found that only organic revenue growth increased shareholder value.[^9]

Does the organic number itself help investors? On average, yes. John Campbell, Kurt Gee and Zac Wiebe studied company results announcements from 2015 to 2018 and found that about one in five included an adjusted revenue figure, usually a growth rate such as organic growth. Companies tended to publish one when reported revenue was not comparable with the year before, not to cover up poor results. Adjusted revenue growth predicted future revenue growth better than reported growth did, and stock prices responded to it.[^10]

But the same measure can be used to steer opinion. Theodore Christensen and colleagues found that the share of S&P 1500 companies giving forecasts of an adjusted revenue measure rose from 1.5% in 2005 to 22.7% in 2021. "Organic" and constant-currency revenue were the most common kinds. Organic forecasts were linked with more optimistic analyst estimates, especially after a company had disappointed on revenue, and the definitions of organic growth varied widely between companies.[^11]

This does not make acquisitions bad. Moeller and her colleagues found that a small number of very large deals caused most of the losses.[^8] Some companies buy well, and judging that skill is the job of M&A Discipline. Organic growth simply keeps the two questions apart.

When the headline hid the core: Newell Brands

In April 2016, Newell Rubbermaid, the maker of Sharpie pens and Rubbermaid containers, bought Jarden, the owner of Yankee Candle, Coleman and Mr. Coffee. Including the debt it took on, the price was $18.7 billion. The combined company was renamed Newell Brands.[^12]

Fiscal year	Net sales	Reported growth	Core sales growth
2016	$13.26 billion	+124.2%	+3.7%
2017	$14.7 billion	+11.1%	+0.8%
2018	$8.6 billion	−9.6%	−5.2%
2019	$9.7 billion	−4.3%	−1.9%

"Core sales" is Newell's name for organic growth. The 2018 and 2019 rows cover continuing operations only, against prior years restated to $9.6 billion and then $10.2 billion as Newell changed which businesses it planned to sell.[^13][^14][^15][^16]

The 124% headline in 2016 said almost nothing about the business, because Jarden alone added $7.3 billion of sales that year.[^12] Core sales growth of 3.7% was the number to watch. Even that came with a twist: Newell counted Jarden in core sales from the day the deal closed, on a "pro forma" basis, as if the two companies had already been combined a year earlier.[^13] The company disclosed this, and for a merger of near-equals it is a defensible choice. But it means "core" growth included Jarden's own growth from day one, rather than after the usual twelve months.

Then the core faded. Newell's first guidance for 2017 was core sales growth of 3% to 4%. In February 2017 it widened that to 2.5% to 4%, later cut it to 1.5% to 2%, and delivered 0.8%.[^13][^17] It pointed to retailers cutting their inventories, including office-supply stores destocking its writing products and a leading baby retailer going through bankruptcy reorganization.[^14] On January 25, 2018, it announced plans to sell a large part of the company, and its shares fell more than 20% in a day.[^18] Core sales fell 5.2% in 2018, and Newell wrote down the value of its businesses by $9.8 billion, including $5.1 billion of goodwill, the premium it had paid for acquisitions.[^15]

Run the three questions in the next section on Newell and each one flashed a warning in 2017. Organic growth was slowing. Nearly all of the headline growth had been bought. And results kept falling short of the company's own targets. The write-downs came in 2018, but the core sales line had been sliding all through 2017.

The key questions investors ask

1. Direction: is organic growth speeding up or slowing down?

The main comparison is with the company's own history. Organic growth that speeds up once portfolio and currency effects are removed, say from 3% to 6%, is the improving case. Growth staying inside its usual range is stable. Changes matter more than levels, because stock prices usually reflect the current level. Look at three years or more, since one quarter can be distorted by shipment timing or the number of selling days.

Compare each quarter with the same quarter a year earlier, not with the quarter before, because many businesses are seasonal. And when last year was unusually strong or weak, look at the two-year average too. A 1% rise on top of last year's 9% is not the same as 1% on top of last year's fall. Unilever, the worked example below, publishes a two-year average for this reason.[^19]

2. Reliance: how much of reported growth comes from deals and currency?

Put organic and reported growth side by side and measure the gap in percentage points. Then split the gap into acquisitions, divestitures, and currency. The deteriorating case is underlying growth slowing while reported growth leans more on acquisitions or currency. A company whose organic growth drifts from 5% to 1% while it keeps reporting 8% is buying its headline. Newell in 2016 and 2017 is the pattern.

The source of the gap matters. A currency gap tends to reverse when exchange rates swing back. An acquisition gap is permanent, and the question becomes whether the price paid will earn a decent return.

The gap can also run the other way, with organic growth well above reported growth. That is not automatically good news. Ask whether the organic figure is real. Part of it may be inflation in a weak currency, as the Unilever example shows, and part of it, as at Valeant, may be revenue that belongs somewhere else.

3. Benchmark: how does it compare with peers and targets?

Many companies publish a long-term organic growth target. Comparing results with that target, and with competitors in the same markets, shows whether the company is gaining ground or riding its industry. Since market growth drives so much of organic growth,[^6] 4% is strong in a market growing 2% and weak in one growing 8%.

Check that peers measure the same thing. One company may count price rises in very high-inflation countries in full while another caps them, and one may treat new stores as organic while another excludes them. A target matters only if the company hits it. Newell's repeated cuts in 2017 were themselves a warning.

Nuances

Organic growth has parts. It splits into Volume Growth and Price and Mix Growth. Growth from more units is usually more durable than growth from price alone. For subscription businesses it splits into Customer Base Growth and Existing-Customer Expansion. For builders and equipment makers, organic revenue often comes from Backlog Conversion.

Definitions differ in the details. Unilever counts in its organic measure the sales of an acquired brand once it is launched in a country where it was not sold before, reasoning that those sales come from Unilever's own distribution network rather than the purchase.[^19] Newell counted Jarden from day one. Kroger, the U.S. grocer, treats a supermarket as "identical" only once it has operated for five full quarters without being expanded or moved.[^20] None of these rules is wrong, but each changes the number.

Hyperinflation can flatter it. In countries with very high inflation, such as Argentina and Turkey in recent years, companies raise local prices sharply. Organic growth counts those price rises but leaves out the currency collapse that cancels them in dollars or euros. Some companies cap this, as the Unilever example below shows. Others do not. In 2024, about 5 of the 11 points of Coca-Cola's price/mix growth came from "markets experiencing intense inflation".[^21]

The calendar matters. Kroger's fiscal 2023 had 53 weeks instead of 52, so it reported results excluding the "Extra Week" and adjusted the earlier year to a 53-week basis when measuring identical sales.[^20] A year with more selling days, or an Easter that moves from one quarter to another, can shift growth by a point or more without any change in demand.

Lost contracts count. Organic growth includes business the company loses, not just business it wins. Kroger's identical sales, excluding fuel, rose 0.9% in fiscal 2023. Without the end of its agreement with the pharmacy benefit manager Express Scripts, which cut pharmacy sales by about $1.8 billion, the figure would have been 2.3%.[^20] That is real lost business, so counting it is right, but you need to know it happened to judge the trend.

It varies by industry.

• Consumer goods companies such as Unilever and Coca-Cola usually publish organic growth with a price and volume split, which makes them the easiest to analyze. Watch hyperinflation pricing.
• Retailers and restaurants use comparable-store sales, which are stricter than organic growth: new stores are left out even though they were built, not bought. A chain opening many stores can show strong total growth with weak comparable sales. Fuel and other pass-through prices also distort totals. In fiscal 2022, Kroger's total sales rose 7.5%, its fuel sales rose 26.9% mainly because the average pump price rose 28.5%, and its identical sales without fuel rose 5.6%.[^20]
• Industrial companies often call the measure "core growth". Many make a steady stream of small acquisitions, so the anniversary rule and the size of the acquisitions line matter more than usual.
• Drug makers face patent expiries, when a big product loses protection and its sales collapse. That loss is organic, and one product can swing the rate. Some drug makers report "operational" growth, which removes currency but not deals. Do not confuse it with organic growth.
• Subscription software companies rarely publish an organic figure, and small acquisitions are often not disclosed separately when they are immaterial. Check the acquisitions note before treating headline growth as organic.
• Insurers report organic premium growth, and the insurer study above found it was the only kind that added value.[^9]

Selling a slow business raises the rate. If a company sells or spins off its slowest-growing division, its organic growth rises the next year, even though no remaining business grew any faster. The Unilever example shows how large this effect can be.

A worked example: Unilever

Unilever, the owner of Dove, Hellmann's and Knorr, reports in euros and publishes a full bridge from reported turnover (its word for revenue) to underlying sales growth (USG), its name for organic growth. USG leaves out acquisitions, disposals, currency, and price growth above 26% a year in hyperinflationary economies.[^22] Unilever has also been reshaping itself. It sold its spreads business in 2018 and its tea business in 2022, spun off its ice cream business (now The Magnum Ice Cream Company) in December 2025, and in March 2026 agreed to combine its Foods business with McCormick.[^23][^22][^19]

Here is the bridge for recent fiscal years, which end December 31. The pieces multiply rather than add, so they do not sum exactly.[^23][^24]

Fiscal year	Turnover	Turnover growth	Acquisitions	Disposals	Exchange rates	Hyperinflation pricing above cap	USG	Volume	Price
2019	€52.0 billion	+2.0%	+0.7%	−3.0%	−0.7%	+2.2%	2.9%	+1.2%	+1.6%
2020	€50.7 billion	−2.4%	+1.4%	−0.2%	−5.7%	+0.3%	1.9%	+1.6%	+0.3%
2021	€52.4 billion	+3.4%	+1.4%	−0.1%	−2.6%	+0.3%	4.5%	+1.6%	+2.9%
2022	€60.1 billion	+14.5%	+0.8%	−1.8%	+4.7%	+1.4%	9.0%	−2.1%	+11.3%
2023	€59.6 billion	−0.8%	+0.5%	−2.1%	−7.8%	+2.2%	7.0%	+0.2%	+6.8%
2024	€60.8 billion	+1.9%	+0.4%	−1.8%	−2.8%	+2.1%	4.2%	+2.9%	+1.3%
2025	€50.5 billion	−3.8%	+0.6%	−1.8%	−6.3%	+0.5%	3.5%	+1.5%	+2.0%
First half 2026	€25.6 billion	+0.5%	+1.3%	−0.5%	−5.1%	+0.3%	4.8%	+4.2%	+0.6%

The 2025 row excludes ice cream from both years, so it compares €50.5 billion with a re-presented 2024 figure of €52.5 billion, not the €60.8 billion first reported.[^22]

Direction. USG was 2.9% in 2019 and 1.9% in 2020, the first year of the pandemic. It then climbed to a peak of 9.0% in 2022, before slowing to 7.0%, 4.2% and 3.5%. But the first half of 2026 reached 4.8%, with 5.8% in the second quarter.[^19] The direction has turned.

Reliance. Very little of Unilever's growth was bought. Acquisitions added at most 1.4 points in any year. Disposals took away 3.0 points in 2019, after the spreads sale, and about 2 points a year from 2022 to 2025. Currency did most of the damage: in 2023, turnover fell 0.8% even though USG was 7.0%, because exchange rates cut 7.8 points. In 2020 and 2025, exchange rates cut around 6 points.[^23][^24] And a spin-off as large as ice cream never appears in the disposals column, because the earlier year is re-presented without it.

Quality. The mix of price and volume changed completely. In 2022, USG of 9.0% came from 11.3% higher prices and 2.1% lower volume: customers paid more and bought less, even after 1.4 points of hyperinflation pricing were removed.[^24] By the first half of 2026, the story had reversed: 4.2 points of volume and only 0.6 of price.[^19] Volume-led growth is usually the more durable kind (see Volume Growth).

Segments. The group number hides a wide spread between Unilever's four business groups.[^22][^19]

Business group	2025 turnover	2025 USG	2025 volume	2025 price	First half 2026 turnover	First half 2026 USG	First half 2026 volume	First half 2026 price
Beauty & Wellbeing	€12.8 billion	4.3%	2.2%	2.1%	€6.5 billion	5.9%	4.5%	1.3%
Personal Care	€13.2 billion	4.7%	1.1%	3.6%	€6.8 billion	4.8%	4.1%	0.7%
Home Care	€11.6 billion	2.6%	2.2%	0.4%	€6.0 billion	7.6%	7.4%	0.2%
Foods	€12.9 billion	2.5%	0.8%	1.7%	€6.3 billion	1.2%	1.2%	0.0%
Unilever	€50.5 billion	3.5%	1.5%	2.0%	€25.6 billion	4.8%	4.2%	0.6%

Foods is about a quarter of turnover and the slowest group. A rough calculation shows what happens when it leaves. Weight each of the other three groups' USG by its turnover, and the remaining business grew about 3.9% in 2025 and about 6.0% in the first half of 2026, against 3.5% and 4.8% for the whole group. That is an estimate from the table, not a company figure, but it shows that up to a point of the future organic rate will come from the portfolio change alone.

Benchmark. Unilever's multi-year target is USG of 4% to 6%. After the first half of 2026 it raised its outlook: USG within that range for the year, with around 3% volume growth, and 4% to 5% USG in the second half, led by pricing.[^19] By region, emerging markets, 60% of turnover, grew 7.0% in the first half, while developed markets grew 1.5% and Europe shrank 0.9%.[^19] In 2025, the two had grown at about the same rate, 3.6% and 3.5%.[^22] The recovery is real, but it is concentrated in emerging markets, so a peer comparison should match that mix.

The thesis. An investor could state: "Unilever's organic growth has shifted from price to volume and will stay inside its 4% to 6% range." A clear resolution rule: "Unilever reports USG of at least 4.0% for both fiscal 2026 and fiscal 2027, with underlying volume growth of at least 2.0% in each year." Fiscal 2027 is judged on continuing operations, excluding Foods once it is separated.

How new evidence updates it. Each release moves the view. Volume above 2% with modest pricing strengthens it; growth slipping back to price alone weakens it. Three examples show how the rule works:

• USG of 4.5% with 2.8% volume: the thesis holds on both counts.
• USG of 4.3% with 1.0% volume: the headline sits in the range, but the thesis fails, because its claim was about where the growth comes from.
• Foods leaves in mid-2027, reported turnover drops by about a quarter, and continuing USG is 5%: the thesis holds. The fall in turnover is a portfolio change, which is exactly what organic growth strips out. So is a fall caused by a strong euro.

Two things would force a rethink rather than a simple update. One is a change in how Unilever defines USG, such as a different hyperinflation cap. The other is a large acquisition, which would add a new business to the base after its anniversary. Either way, put the old and new figures on the same basis before judging the thesis.

Common traps

• Trusting the label. "Organic" is the company's own definition. Read it and check the reconciliation. Valeant's organic growth followed its definition on paper while moving acquired revenue into the organic bucket.
• Ignoring the anniversary. After twelve months, an acquired business joins the organic base, and its growth can flatter the core.
• Confusing constant currency with organic. "Constant-currency" or "operational" growth removes exchange rates but not deals.
• Inflation counted as growth. Hyperinflationary pricing can lift organic growth without adding value in your currency.
• Missing the base change. A spin-off can disappear by re-presenting last year rather than through the bridge, and restated bases, like Newell's in 2018 and 2019, can make old and new figures incomparable.
• Reading only the gap. Organic growth above reported growth is not automatically good. Ask why.
• Forgetting the market. Organic growth includes market growth. Compare with peers.
• Forgetting the calendar. An extra week, extra selling days, or a moving holiday can add or remove a point of growth.
• Ignoring who the customer is. Fast organic growth from one customer, especially one tied to the company, as Philidor was, is fragile. Check the largest customers and whether receivables are growing much faster than sales.
• Taking guidance at face value. Organic growth forecasts tend to come with optimistic analyst estimates, and Newell lowered its 2017 guidance twice.

Checklist

1. How does the company define organic growth, and does the reconciliation add up?
2. What was organic growth in each of the last three to five years? Is it speeding up, steady, or slowing, including on a two-year average?
3. How big is the gap between organic and reported growth, and is it from acquisitions, divestitures, or currency?
4. Is reported growth relying more on acquisitions while organic growth fades?
5. How much of organic growth is volume and how much is price? Is any of it hyperinflationary pricing?
6. Did a recent sale, spin-off, or restatement change the base or the mix of businesses?
7. When do recent acquisitions pass their anniversary, and how fast are they growing?
8. Are calendar effects, one large customer, or a contract won or lost driving the change?
9. Does organic growth agree with the segment results, and are receivables growing in line with sales?
10. How does organic growth compare with the company's target, its track record against past targets, and its competitors measured the same way?

Key takeaways

• Organic growth is revenue growth after removing acquisitions, divestitures, and currency. It shows whether the existing business is expanding.
• It is a company-defined, non-GAAP measure, so the definition and reconciliation matter as much as the number. Research finds it usually predicts future growth better than reported growth, but its definitions vary widely.
• Research finds that organic growth has created more shareholder value than bought growth, mainly because buyers pay premiums.
• Watch the direction of organic growth, how much reported growth relies on deals and currency, and how it benchmarks against peers and targets.
• Split organic growth into volume and price, and watch for hyperinflation, portfolio changes, calendar effects, and lost or concentrated customers.

Data needed to support this thesis

To build and keep updating an organic growth thesis, you need the following data.

Required

Data	What it tells you	Where to find it
Revenue history	Reported revenue for each period, the starting point for the bridge to organic growth	Annual reports (Form 10-K, or Form 20-F and Form 6-K for foreign companies) and quarterly or half-year reports; at least three comparable periods
Organic growth disclosures	The company's own definition of organic growth, and its reconciliation from reported growth	The non-GAAP reconciliation tables in each results release (an exhibit to Form 8-K, or Form 6-K for foreign companies), and the sales discussion in the annual and quarterly reports

Helpful

Data	What it tells you	Where to find it
Acquisition and divestiture data	The size and timing of deals, so you can see which revenue was bought or sold and when it passes its anniversary	The acquisitions and disposals notes in filings; deal announcements in results releases
Exchange rates	How much of reported growth is just currency movement	The currency line of the company's bridge; central-bank exchange-rate data
Segment financials	Which businesses are growing fastest and which are slowing, and what the rate will be after a sale or spin-off	The segment note in annual and quarterly reports

Where organic growth figures come from

Revenue is reported by every listed company under the same accounting rules. Organic growth exists only when a company chooses to publish it, so it helps to know who produces it and where it appears.

• Who. The company's own management calculates and publishes it. It sits outside the audited financial statements, so no auditor signs off on the number itself. Analysts and data services mostly copy the company's figure. Few outsiders can rebuild it, because only the company knows how much revenue each acquisition brought in, month by month.
• What. Three pieces: the rate; the definition, meaning what is left out and when an acquired business joins the base; and the reconciliation, a table that walks from reported growth to organic growth.
• Where. First, the earnings release, the press release that comes out with each set of results. U.S. companies file it with the SEC as an exhibit to a Form 8-K, and foreign companies such as Unilever file results on Form 6-K. The reconciliation usually sits in tables near the end, under a heading such as "non-GAAP measures". The annual report (Form 10-K or 20-F) and the quarterly report (Form 10-Q) often repeat the figures in management's discussion of sales, sometimes for two or three years, which helps build a history. Company investor-relations websites post the same releases. Managers also quote the number on earnings calls, but a spoken figure is no substitute for the table.
• Format. Percentages, usually rounded to whole numbers or one decimal place, in a table with columns for reported growth, acquisitions, divestitures, currency and organic growth, often with a volume and price split. Some bridges add up; others multiply, like Unilever's. The figures sit in text and tables, not in the tagged number fields that financial databases read from filings, so databases built on those fields do not carry it.
• When. With every earnings release, usually a few weeks after each quarter ends. The full-year figure comes with the fourth-quarter release. Many European companies publish full results every six months, with shorter quarterly updates. Past figures can change: after a spin-off, Unilever re-presented its 2024 figures.[^22]
• Why. GAAP has no rule for organic growth. Companies tend to publish it when reported revenue is not comparable with the year before,[^10] and because it is non-GAAP, U.S. rules require the reconciliation.[^5] That table is what lets you check the number rather than trust it.

Not every company publishes organic growth. It is common among consumer goods companies, industrial companies and insurers, and rare among software companies and banks. When a company does not publish it, treat that as a gap. Headline growth is not a substitute.

The comparisons must be like-for-like. If a company redefines "organic", restates past years for a spin-off, or changes when an acquired business joins the organic base, put the old and new figures on the same basis before comparing.

The thesis is usually updated by three kinds of events: earnings releases (new organic growth figures), acquisitions (which change the base and the bridge), and divestitures (which remove revenue and can raise the growth rate). A typical horizon for checking the thesis is about two years.

In the Unilever example, the required data was the company's revenue and its underlying sales growth bridge, with the definition, from its full-year and half-year reports on Form 6-K.[^23][^22][^24][^19] The helpful data was the acquisitions, disposals, and exchange-rate columns of that same bridge, the business-group and regional figures, and the portfolio changes the reports described.[^22][^24][^19] The example did not use any separate deal-size data beyond what those reports gave. The Newell case used the company's results releases and its annual report for the deal price and the sales Jarden added.[^12][^13][^14][^15][^16]

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[^1]: Aswath Damodaran, "Checkmate or Stalemate? Valeant's Fall from Investing Grace," Musings on Markets (November 2015). Blog. [^2]: SEC, Order Instituting Cease-and-Desist Proceedings against Valeant Pharmaceuticals International, Inc. (now Bausch Health), Release No. 33-10809 (July 31, 2020). SEC order. [^3]: Stephen Gandel and Reuters, "What Caused Valeant's Epic 90% Plunge," Fortune (March 20, 2016). Fortune. [^4]: SEC Division of Corporation Finance, Non-GAAP Financial Measures, Compliance and Disclosure Interpretations, Question 104.06 on constant-currency presentations (January 11, 2010). SEC. [^5]: Regulation G, 17 CFR § 244.100(a)(2). Cornell LII. [^6]: Mehrdad Baghai, Sven Smit and S. Patrick Viguerie, "The granularity of growth," McKinsey Quarterly (May 2007). McKinsey. [^7]: Marc Goedhart and Tim Koller, "The value premium of organic growth," McKinsey Quarterly (January 2017); acquired growth measured by the increase in goodwill and intangibles; banks, insurers, and extraction and commodity companies excluded. McKinsey. [^8]: Sara B. Moeller, Frederik P. Schlingemann and René M. Stulz, "Wealth Destruction on a Massive Scale?," Journal of Finance 60, no. 2 (2005). NBER. [^9]: Gerhard Kling, Abby Ghobadian and Nicholas O'Regan, "Organic growth and shareholder value: A case study of the insurance industry," International Journal of Research in Marketing 26, no. 4 (2009). RePEc. [^10]: John L. Campbell, Kurt H. Gee and Zac Wiebe, "The Determinants and Informativeness of Non-GAAP Revenue Disclosures," The Accounting Review 97, no. 7 (2022): 23–48. Penn State. [^11]: Theodore E. Christensen, Lynn Davis, Edgar Rodriguez-Vazquez and Xiaoxi Wu, "The Voluntary Disclosure of Non-GAAP Revenue Guidance," working paper; S&P 1500 companies, 2005 to 2021; findings as summarized by the authors on the CLS Blue Sky Blog (June 16, 2025). CLS Blue Sky Blog; SSRN. [^12]: Newell Brands, Annual Report on Form 10-K for fiscal 2016 (March 1, 2017): Jarden total consideration of $18.7 billion including debt assumed, and $7.3 billion of Jarden net sales in 2016. SEC filing. [^13]: Newell Brands, fourth-quarter and full-year 2016 results, Exhibit 99.1 to Form 8-K (February 6, 2017): net sales, core sales growth and definition, and initial and revised 2017 guidance. SEC filing. [^14]: Newell Brands, fourth-quarter and full-year 2017 results, Exhibit 99.1 to Form 8-K (February 16, 2018). SEC filing. [^15]: Newell Brands, fourth-quarter and full-year 2018 results, Exhibit 99.1 to Form 8-K (February 15, 2019): continuing-operations net sales and core sales, and $9.8 billion of 2018 impairment charges. SEC filing. [^16]: Newell Brands, fourth-quarter and full-year 2019 results, Exhibit 99.1 to Form 8-K (February 14, 2020). SEC filing. [^17]: Newell Brands, "Newell Brands Announces Acceleration of Transformation Plan, Preliminary 2017 Results and Initial 2018 Guidance," Exhibit 99.1 to Form 8-K (January 25, 2018). SEC filing. [^18]: CNBC, "Newell Brands stock craters 20%, unveils plans to sell off assets" (January 25, 2018). CNBC. [^19]: Unilever, First Half 2026 Results, Form 6-K (July 28, 2026): USG bridge, business-group and regional USG, two-year average volume growth, USG definition including acquired brands launched in new countries, and portfolio changes. SEC filing. [^20]: The Kroger Co., Annual Report on Form 10-K for fiscal 2023, the 53 weeks ended February 3, 2024 (April 2, 2024): identical sales definition, the Extra Week, Express Scripts, and fiscal 2022 fuel and identical sales. SEC filing. [^21]: The Coca-Cola Company, fourth-quarter and full-year 2024 earnings release (February 11, 2025). SEC filing. [^22]: Unilever, 2025 Full Year Results, Form 6-K (February 12, 2026): USG definition, 2025 bridge, 2024 re-presented for the Ice Cream demerger, business-group and regional USG, and the 4% to 6% multi-year range. SEC filing. [^23]: Unilever full-year results on Form 6-K for fiscal 2019 (January 30, 2020), including the spreads disposal, and 2020 (February 4, 2021); group totals from the business-group tables. [^24]: Unilever full-year results on Form 6-K for fiscal 2021, 2022, 2023, 2024 and 2025; group totals from the business-group tables.