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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