SaaS Metric
MRR Growth Rate
Definition
MRR growth rate is the percentage change in monthly recurring revenue from one period to the next. MRR growth rate = (MRR this month − MRR last month) ÷ MRR last month × 100. It nets the four MRR movements — new, expansion, contraction, and churn — into a single growth figure, and small monthly rates compound into large annual differences.
Formula
MRR growth rate = (MRR end of period − MRR start of period) ÷ MRR start of period × 100 Net new MRR = new MRR + expansion MRR − contraction MRR − churned MRR
Benchmark
Early-stage SaaS often targets ~10–20% month-over-month; sustained 10%+ monthly growth is very strong and naturally slows as the base grows larger.
Growth rate vs. net new MRR
Net new MRR is the absolute dollar change in a period — the sum of new and expansion revenue minus contraction and churn. MRR growth rate expresses that change as a percentage of where you started. Both matter: the dollar figure tells you the magnitude, the rate tells you the pace relative to your size.
Percentage growth almost inevitably slows as the base grows, because the same dollar of net new MRR is a smaller share of a bigger number. That is why mature companies are judged on absolute net new MRR and the Rule of 40, while early-stage companies are judged on percentage growth. Comparing a large company unfavourably to an early-stage growth rate is a category error.
Frequently asked questions
How do you calculate MRR growth rate?
Subtract last period MRR from this period MRR, divide by last period MRR, and multiply by 100. It captures the net effect of new, expansion, contraction, and churned MRR in one figure.
What is a good MRR growth rate?
Early-stage SaaS often aims for roughly 10–20% month-over-month, and sustained 10%+ monthly growth is very strong. Growth rate naturally decelerates as the revenue base gets larger, so absolute net new MRR becomes the better lens at scale.
Why does percentage growth slow as a company grows?
Because the same dollar of net new MRR represents a smaller percentage of an ever-larger base. A company can keep adding more revenue each month while its growth rate falls — which is why mature SaaS is judged on absolute additions and efficiency, not just rate.
Related metrics
Monthly Recurring Revenue (MRR)
Monthly recurring revenue (MRR) is the normalised, predictable subscription revenue earned each month. Learn the MRR formula, its movement components, and how it relates to ARR.
Annual Recurring Revenue (ARR)
Annual recurring revenue (ARR) is the normalised yearly value of recurring subscriptions. Learn the ARR formula, how it differs from MRR and total revenue, and when to use it.
Expansion Revenue
Expansion revenue is additional recurring revenue from existing customers via upgrades, seats and cross-sells. Learn how it drives net negative churn and NRR above 100%.
Rule of 40
The Rule of 40 says a healthy SaaS company’s growth rate plus profit margin should equal at least 40%. Learn the formula, which margin to use, and how to read the score.
Track this automatically
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Benchmarks are general SaaS ranges and vary by segment, stage and business model. Last reviewed 2026-05-30.