Yes, though stage creep is a real problem and some applicants show up not just with a prototype but revenue as well.

Imho, to make most out of YC demo day, you'd have to have something concrete ready, and so it helps to have started working before having interviewed with YC.

Unless you just came up with the idea, it's useful to have talked to users already and/or have some data that the idea is good. Having revenue or being launched already is not a requirement.