The current period's figure, revenue, cost, savings, extrapolated to a full year. A quick way to annualise the present, and an assumption-laden way to describe the future.
Every run-rate claim contains a hidden clause: "provided the current period is representative and nothing changes". Both halves of that clause deserve a hearing before the number reaches a slide.
Last reviewed 3 July 2026 · Free and ungated
Operators who have presented and picked apart these numbers can test what the extrapolation is hiding, before you commit against it.
Get independent perspectivesA run rate takes performance over a recent period, a month, a quarter, and scales it to twelve months: monthly recurring revenue of two million becomes a twenty-four million annual run rate. The same construction is applied to costs and, in transformation and M&A contexts, to savings, "run-rate synergies" being the annualised value of measures once fully implemented.
The extrapolation is only as good as the period chosen, and the period is chosen by someone with a story to tell. A seasonal business annualised from its strongest quarter, a growth curve annualised from the month after a one-off contract landed, a cost base annualised the week after redundancies but before the rehiring: each produces a technically accurate number that misdescribes the year ahead. Run-rate savings deserve particular care in decision papers, because "achieving a run rate" and "banking the cash" are different events, often separated by a year or more, and announcements routinely celebrate the first as if it were the second.