What is MRR growth rate?
MRR growth rate is the percentage change in your MRR from the start of a period to its end. Measured monthly, it is often called MoM growth. It is the single number most founders quote when asked how the business is doing.
It is a net number. New customers, upgrades and returning customers push it up. Downgrades and cancellations pull it down. The rate is what is left after all of them.
The MRR growth rate formula
Worked example
A hypothetical company starts June at $40,000 MRR and ends it at $41,000 MRR.
At $40,000 MRR this company sits in the $10K–$50K tier. The benchmark median there is 1.5% a month and the top 25% starts at 4.0%, so 2.5% is above the median.
From monthly to annual growth
Monthly growth compounds. Each month’s growth is applied to a larger base than the month before, so twelve months at 2.5% is not 30% a year.
The same works in reverse. A plan to grow 20% this year needs about 1.5% a month, not 1.7%.
What sits under the number
Two companies can both grow 2.5% a month in very different shape. One adds a lot of new business and loses a lot to churn. The other adds less but keeps nearly everything. Break the change into its movements in MRR Movement, and compare gains with losses using the quick ratio.
MRR growth rate vs NRR
| MRR growth rate | NRR | |
|---|---|---|
| Includes new customers | Yes | No |
| Includes churn and contraction | Yes | Yes |
| Answers | Is the whole business growing? | Does the existing base grow on its own? |
High growth with NRR well below 100% means new sales are refilling a leaking base. That growth gets harder every month, because the leak grows with the base.
Common MRR growth rate mistakes
- Multiplying by 12. Monthly growth compounds. Use (1 + rate)^12 − 1 for the annual figure.
- Averaging monthly rates. A +10% month followed by a −10% month leaves you below where you started, not flat. Compare MRR over the full period instead.
- Counting one-time charges. Setup fees and one-off invoices aren’t recurring. Leave them out of MRR, or growth swings with every large deal.
- Looking only at the net number. A steady rate can hide rising churn offset by rising new business. Check the movements behind it.
MRR growth rate benchmarks
Benchmarks by revenue stage, compiled from published SaaS studies and North Metric’s own analysis.For MRR growth, annual ARR growth ranges for each stage were converted to monthly rates. For the $10K–$50K tier, for example, 5%, 20% and 60% a year become 0.4%, 1.5% and 4.0% a month. Read them as a guide, not measured monthly data.
| Stage · MRR | Bottom 25% | Median | Top 25% |
|---|---|---|---|
| Seed · < $10K | -0.9% | 1.9% | 6.0% |
| Early · $10K – $50K | 0.4% | 1.5% | 4.0% |
| Growth · $50K – $100K | 0.4% | 1.5% | 3.4% |
| Scale · $100K – $500K | 0.6% | 1.5% | 3.1% |
| Enterprise · $500K+ | 0.8% | 1.9% | 3.1% |
Frequently asked questions
Is 5% monthly MRR growth good?
Yes, at almost any stage. Below $10K MRR the benchmark median is 1.9% a month and the top 25% starts at 6.0%. From $10K to $50K MRR the top 25% starts at 4.0%, and above $50K MRR it starts at 3.1% to 3.4%. Kept up for a year, 5% a month compounds to about 80% annual growth. These are monthly figures converted from annual growth ranges.
How do I convert monthly MRR growth to annual?
Compound it: annual growth = (1 + monthly rate)^12 − 1. 2% a month is about 27% a year, not 24%. 5% a month is about 80% a year, not 60%.
What is the difference between MRR growth rate and net new MRR?
Net new MRR is the dollar change: ending MRR minus starting MRR. MRR growth rate divides that change by starting MRR, so you can compare months and companies of different sizes.
Can MRR growth rate be negative?
Yes. If churn and contraction remove more MRR than new business, expansion and reactivation add, MRR shrinks and the rate is below zero. Below $10K MRR, the bottom 25% of companies sit at −0.9% a month or lower.
From metric to action
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