Monthly Growth Rate Calculator
Monthly Growth Rate tracks the month-over-month percentage change in MRR or ARR. Consistent growth is the lifeblood of SaaS companies and the primary driver of valuation. Understanding growth components helps identify what is working and what needs improvement.
How to Calculate
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Monthly Growth Rate = (Current MRR - Previous MRR) / Previous MRR × 100
Growth Components:
Net Growth = New MRR + Expansion MRR - Churned MRR - Contraction MRR
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Industry Benchmarks
| Monthly Growth | Annual Equivalent | Stage |
|---|---|---|
| 2-3% | 27-43% | Mature |
| 5-7% | 80-125% | Growth |
| 10-15% | 214-435% | Hypergrowth |
| >20% | >790% | Exceptional |
Interpreting Your Results
Compound growth creates exponential outcomes. 10% monthly growth means you will 3x in a year. Track growth by source (new vs expansion) and ensure you are not masking churn with new customer acquisition.
Why This Metric Matters
Understanding Monthly Growth Rate helps you:
- Make data-driven business decisions with confidence
- Benchmark against industry standards and competitors
- Identify areas for improvement in your business model
- Communicate performance clearly to stakeholders and investors
- Set realistic goals and track progress over time
Best Practices for Accurate Measurement
1. Use consistent time periods: Compare month-over-month or quarter-over-quarter consistently 2. Include all relevant data: Ensure you capture all revenue sources and costs 3. Track cohorts separately: Analyze metrics by customer segment and acquisition date 4. Monitor trends: Single snapshots are less valuable than trends over time 5. Automate tracking: Use analytics tools to ensure consistent, accurate measurement
Every Metric From These Inputs
100 customers at $49 with 3% monthly churn and $200 CAC:
| Metric | Value | Formula |
|---|---|---|
| MRR | $4,900 | customers × ARPU |
| ARR | $58,800 | MRR × 12 |
| Annual churn | 30.6% | 1 − (1 − monthly)¹² |
| Average lifetime | 33.3 months | 1 ÷ monthly churn |
| LTV | $1,633 | ARPU ÷ monthly churn |
| LTV : CAC | 8.2:1 | LTV ÷ CAC |
| CAC payback | 4.1 months | CAC ÷ ARPU |
What Good Looks Like
| Metric | Healthy | Concerning |
|---|---|---|
| Monthly churn (SMB) | Under 3% | Above 5% |
| Monthly churn (enterprise) | Under 1% | Above 2% |
| LTV : CAC | 3:1 or better | Below 1:1 |
| CAC payback | Under 12 months | Above 18 |
| Net revenue retention | Above 100% | Below 90% |
The Metric This Set Omits
Net revenue retention — expansion revenue minus churn and contraction, from existing customers only. Above 100% means the business grows without acquiring anyone, which is the single strongest signal in SaaS and the one that most affects valuation. It cannot be derived from the inputs above because it needs upgrade and downgrade data.