MRR growth rate

Q: What is a good MRR growth rate?

For an early-stage SaaS company, 10 to 20 percent month over month is strong, 5 to 10 percent is acceptable, and below 5 percent is slow for that stage. These rates fall as the company gets bigger because the same euro gain is a smaller percentage of a larger base, so a mature company growing 5 percent a month is doing very well.

Q: How do you calculate MRR growth rate?

Subtract starting MRR from ending MRR, then divide by starting MRR and multiply by 100. For example, going from 50,000 to 55,000 euros means 55,000 minus 50,000 is 5,000, divided by 50,000 gives 10 percent month over month.

Q: Why does compounding matter more than a single month?

MRR growth compounds, so a modest rate sustained over many months produces enormous totals. Ten percent month over month compounds to more than tripling MRR in a year. A single big month is noise; what builds a large business is a healthy growth rate held steady period after period.

How fast your monthly recurring revenue is climbing, period over period — the headline pace of your business and the number that compounds into everything else.

In plain English

MRR growth rate is simply the speed at which your recurring revenue is rising. You take where your MRR ended, compare it to where it started, and express the change as a percentage of the starting point. It's the most-watched number in SaaS because it's what compounds: a business growing 10% a month doesn't grow ten times faster than one growing 1% — over a year it grows dramatically more, because each month's gain builds on a bigger base. The percentage naturally shrinks as you get larger, so what looks impressive at €50k of MRR is a different bar than the same percentage at €5M.

The formula

MRR growth rate = (MRR at end − MRR at start) ÷ MRR at start, per period

Pick a consistent period — usually month over month (MoM) for early-stage companies — and apply it the same way every time so the trend is comparable.

A worked example

You start the month with €50,000 in MRR and finish it with €55,000.

MRR growth rate = (€55,000 − €50,000) ÷ €50,000
MRR growth rate = €5,000 ÷ €50,000 = 10% MoM

Growing 10% month over month is strong for an early-stage company. Held steady, that pace compounds to more than tripling your MRR over a year — which is exactly why the rate matters more than any single month's euro figure.

What's a good MRR growth rate?

Benchmarks are stage-dependent; these are the rough early-stage targets:

MoM growth	Verdict	Context
10–20%	Strong	Early-stage, finding traction
5–10%	Acceptable	Solid, steady progress
< 5%	Slow for early stage	Healthy only at larger scale

What matters most is compounding: a steady rate sustained for many months beats a single spike. As you scale, these percentages should be expected to fall — track them alongside the Rule of 40 to balance growth against profitability.

Frequently asked questions

What is a good MRR growth rate?

For an early-stage SaaS company, 10 to 20 percent month over month is strong, 5 to 10 percent is acceptable, and below 5 percent is slow for that stage. These rates fall as the company gets bigger because the same euro gain is a smaller percentage of a larger base, so a mature company growing 5 percent a month is doing very well.

How do you calculate MRR growth rate?

Subtract starting MRR from ending MRR, then divide by starting MRR and multiply by 100. For example, going from €50,000 to €55,000 means 55,000 minus 50,000 is 5,000, divided by 50,000 gives 10 percent month over month.

Why does compounding matter more than a single month?

MRR growth compounds, so a modest rate sustained over many months produces enormous totals. Ten percent month over month compounds to more than tripling MRR in a year. A single big month is noise; what builds a large business is a healthy growth rate held steady period after period.

MRR · ARR · Rule of 40 · SaaS quick ratio

Learn more

The complete guide to value-based bidding · Value-based bidding without a data team