MRR Growth Rate Calculator Formula
Understand the math behind the mrr growth rate calculator. Each variable explained with a worked example.
Formulas Used
MRR Growth Rate
growth_rate = mrr_previous > 0 ? ((mrr_current - mrr_previous) / mrr_previous) * 100 : 0Net New MRR
net_new_mrr = mrr_current - mrr_previousAnnualized Growth Rate
annualized_growth = mrr_previous > 0 ? (pow(mrr_current / mrr_previous, 12) - 1) * 100 : 0Variables
| Variable | Description | Default |
|---|---|---|
mrr_current | Current Month MRR(USD) | 110000 |
mrr_previous | Previous Month MRR(USD) | 100000 |
How It Works
How to Calculate MRR Growth Rate
Formula
MRR Growth Rate = (Current MRR - Previous MRR) / Previous MRR x 100 Annualized Growth = ((Current / Previous)^12 - 1) x 100
Month-over-month MRR growth is the pulse of a subscription business. Consistent positive growth signals strong product-market fit and effective go-to-market execution. The annualized figure shows what the current growth pace would yield over a full year, accounting for compounding.
Worked Example
MRR grew from $100,000 last month to $110,000 this month.
- 01Growth Rate = ($110,000 - $100,000) / $100,000 x 100 = 10%
- 02Net New MRR = $110,000 - $100,000 = $10,000
- 03Annualized Growth = (1.10^12 - 1) x 100 = 213.8%
Frequently Asked Questions
What is a good MRR growth rate?
For early-stage SaaS (under $1M ARR), 15-20% monthly growth is strong. At $1-10M ARR, 5-10% monthly is good. Above $10M ARR, 3-5% monthly is solid. Growth naturally slows as the revenue base increases.
How do I sustain high growth rates?
Combine new customer acquisition with strong expansion revenue. As the base grows, new customer additions have less percentage impact. Expansion from existing customers through upsells and seat growth becomes critical to maintaining velocity.
Ready to run the numbers?
Open MRR Growth Rate Calculator