What Is Constant Currency?

By Catherine Brock – Updated Jun 11, 2025 at 12:43 PM

Key Points

Constant currency reporting adjusts revenue and earnings to negate exchange rate effects.
Many companies present constant currency data with GAAP results for clearer comparison.
Understanding both adjusted and unadjusted metrics helps evaluate true business performance.

Global businesses sometimes report their revenue and earnings in "constant currency" or "on a constant currency basis." Let's explore what this means so you can evaluate financial reports that make currency adjustments.

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Person sitting at computer while reviewing financial statements. — Image source: Getty Images.

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The table below shows a simple example based on a hypothetical U.S. company doing business in Europe.

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Table data source: Author calculations.
Values (Currency)	Year One	Year Two (Growth)
Revenue (EUR)	$200,000	$300,000 (50%)
Net income (EUR)	$40,000	$55,000 (37.5%)
EUR:USD exchange rate	1.0905	1.079
Revenue (USD)	$183,402	$278,035 (51.5%)
Net income (USD)	$36,680	$50,973 (39%)

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Exchange Rate

The value of one currency in terms of another, determining the rate at which they can be traded in the foreign exchange market.

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Related investing topics

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What Is Forex Trading?

Buying one national currency while selling another is known as forex trading.

How to Calculate Foreign Exchange Gains or Losses

Learn how to interpret a foreign exchange quote and how to think about gains and losses -- with examples.

Investing in International Stocks

Want to expand your portfolio outside the U.S.? Look to international markets.

GAAP vs. Non-GAAP: Everything You Need to Know

Public companies must use generally accepted accounting principles but also at times do their own thing.

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About the Author

Catherine grew up in Southern California wearing a lot of black and trying to perfect the art of sarcasm. Prior to joining The Fool as a contract writer, Catherine was climbing the corporate ladder in marketing roles and dabbling in too many side hustles. When she's not writing, she can be found riding a horse in the country or shopping online for clothes.

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Catherine Brock has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.