KPISales

MRR Growth Rate

Month-over-month percentage increase in Monthly Recurring Revenue

What is MRR Growth Rate?

Monthly recurring revenue (MRR) growth rate is the percentage change in MRR from one month to the next. It shows how fast a subscription business is growing.

Steady MRR growth is the clearest sign that a subscription business is gaining customers and keeping them.

How this KPI is measured

Function
Sales
Sub-function
Recurring Revenue
Industry
Software / Technology (SaaS)
Type
Lagging
Impact
Revenue
Unit
%
Measurement frequency
Monthly
Formula
((MRR this month − MRR last month) / MRR last month) × 100

How to calculate it

Subtract last month's MRR from this month's, divide by last month's, and multiply by 100.

For example, if MRR rose from 200,000 to 210,000, growth is ((210,000 - 200,000) / 200,000) x 100 = 5%.

Break growth into new, expansion, contraction and churn to see what is driving it, and smooth the trend over three months.

Where it is used

  • Tracking momentum

    See monthly progress.

  • Diagnosing growth

    Identify the drivers.

  • Forecasting

    Project future MRR.

How to improve it

Tips and common mistakes

  • Growth rates fall naturally as the base gets larger.
  • Compare with your own plan.
  • Watch quality of growth, not just the rate.

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