MRR growth rate is how much your monthly recurring revenue changed from one month to the next, expressed as a percentage of where you started. It's the metric that turns "we made $4,200 this month" into a judgement about the business: is it compounding, flat, or leaking? This guide covers the formula, the compound version for longer periods, what a good rate looks like at each stage, and the ways the number lies.
The formula
MRR growth rate = (MRR this month − MRR last month) ÷ MRR last month
$2,100 in July and $2,336 in August is (2,336 − 2,100) ÷ 2,100 = +11.2%. A drop from $2,100 to $1,900 is −9.5%. If last month was $0 the rate is undefined - report "new" rather than infinity.
Measure at a consistent point (last day of the month, or the same day each month) using the same MRR definition every time: active paid subscriptions, normalised to monthly, net of discounts, trials excluded. Changing the definition mid-series creates fake growth.
Compound monthly growth rate (CMGR)
Month-over-month rates bounce around. A 30% month followed by a −5% month tells you less than the average, and the right average for growth is geometric, not arithmetic:
CMGR = (MRR at end ÷ MRR at start) ^ (1 ÷ months) − 1
From $1,000 to $2,336 over 6 months: (2.336)^(1/6) − 1 = 15.2% per month. CMGR is the steady rate that would have produced the same result, which makes it the honest number to quote for "how fast are you growing?" over any period longer than a month. Try it in the growth rate calculator.
Why small percentages matter
Growth compounds, so monthly rates that sound modest are large over a year:
| Monthly rate | After 6 months | After 12 months | After 24 months |
|---|---|---|---|
| 3% | 1.19× | 1.43× | 2.03× |
| 5% | 1.34× | 1.80× | 3.23× |
| 8% | 1.59× | 2.52× | 6.34× |
| 10% | 1.77× | 3.14× | 9.85× |
| 15% | 2.31× | 5.35× | 28.6× |
| 20% | 2.99× | 8.92× | 79.5× |
This is also why the same percentage means different things at different sizes. 15% a month on $2,000 is $300 - one or two new customers. 15% a month on $200,000 is $30,000 of net new MRR, every month, forever. Nobody sustains 15% at that scale for long, which is why benchmarks are quoted by stage.
Benchmarks by stage
Rules of thumb drawn from investor guidance and published SaaS data. Treat them as reference points, not verdicts - a bootstrapped founder at 6% with zero marketing spend is doing fine.
| Stage | Strong | Solid | Worth investigating |
|---|---|---|---|
| Under $10k MRR | 15–20%+ | ~10% | < 5% for several months |
| $10k – $100k MRR | 8–12% | 5–8% | < 3% |
| $100k – $1M MRR | 5–8% | 3–5% | < 2% |
| Over $1M MRR | 3–5% | 2–3% | < 1% |
Two cautions. First, early-stage percentages are noisy: at $1,500 MRR one churned customer is −7%. Look at three-month CMGR before drawing conclusions. Second, VC benchmarks (the "T2D3" triple-triple-double-double-double path, ~15% monthly early on) describe companies burning money to grow. If you're profitable and growing 5% a month, you are doing something most funded startups aren't.
Net new MRR: where growth comes from
Growth rate is a single number; net new MRR is its anatomy. Every month:
Net new MRR = new + expansion + reactivation − contraction − churn
Two startups can both show +10% and be in completely different shape: one adding lots of new customers while churning many, the other growing mostly from expansion with almost no churn. The second is far healthier. The SaaS quick ratio - (new + expansion) ÷ (contraction + churn) - captures this in one figure; above 4 is excellent, 2–4 is healthy, below 1 means you're shrinking however many logos you sign.
Ways the number lies
- Counting cash instead of MRR. An annual plan booked in full makes one month look spectacular and the next look like a collapse. Normalise first.
- Including trials. Card-required trials are not revenue until they convert.
- Currency moves. If you bill in EUR and report in USD, a 4% swing in the exchange rate looks like 4% growth (or churn). Convert at a consistent rate.
- Cherry-picked windows. "Up 40% since our worst month" is not a growth rate.
- Self-reported numbers. A screenshot can show any rate you like. A rate computed from verified revenue can't.
Growth on HitMRR
Every startup page on HitMRR shows 30-day growth computed from Stripe-verified snapshots taken every 30 minutes, and races rank founders by how far their verified MRR has moved since the gun fired - not by what they typed in. If you want a growth rate other people can trust, connect Stripe and let the number speak.