SaaS MRR growth rate calculator

MRR growth — the only SaaS metric investors care about

Monthly recurring revenue growth is the single most scrutinized metric in SaaS. Every fundraising deck leads with it. Every board meeting starts with it. And founders regularly mis-calculate it — using simple percentages instead of compound, annualizing linearly instead of geometrically, or conflating gross and net growth.

This calculator uses the correct compound growth formula: Compounded Monthly Growth Rate (CMGR) = (End / Start)^(1/n) − 1. That gives you a rate you can compound forward and annualize accurately.

The CMGR formula

If you went from $50,000 MRR on January 1 to $80,000 MRR on December 31, that's 11 months of growth. Your period growth is 60%. But the monthly growth rate isn't 60% / 11 = 5.5%. It's (80,000 / 50,000)^(1/11) − 1 = 4.4%.

That 4.4% monthly compounds to 67% YoY: (1.044)^12 − 1. Whenever you see someone pitch 10% MoM growth, they're implicitly promising 214% YoY — tripling plus some. The vast majority of SaaS companies don't sustain that.

Benchmarks by stage

• Pre-seed / seed ($0–$1M ARR): 10–20% MoM is achievable. Small base, rapid iteration, product-market fit still forming.
• Series A ($1–5M ARR): 7–10% MoM typical for top performers. SaaStr's Jason Lemkin benchmark: "T2D3" — triple, triple, double, double, double = $1M → $100M in 5 years.
• Series B+ ($5–20M ARR): 5–7% MoM is strong. Below 3% MoM and many investors lose interest.
• Growth stage ($20M+ ARR): 3–5% MoM is healthy. Rule of 40 becomes the new north star (growth% + FCF margin% ≥ 40%).

Gross MRR vs Net MRR

Gross new MRR is dollars of new ARR signed per month. Net new MRR = gross new + expansion − contraction − churn. Net is what shows up in your total MRR growth. A team can have beautiful gross adds but flat net growth if churn and contraction eat the gains.

Best-in-class SaaS companies run negative churn — meaning expansion from existing customers exceeds churn, so even with zero new logos, MRR grows. Datadog, Snowflake, Twilio all have net revenue retention above 120%.

Why growth rate compresses

Growth rate mechanically decays as the base gets bigger. Adding $500k MRR to a $5M base is 10%; adding $500k to a $50M base is 1%. Founders sometimes take this as "we're broken" when the reality is the denominator got 10x harder.

The trick: watch absolute dollars added per month, not just the percentage. A company going from 10% MoM on $1M to 5% MoM on $10M is adding 5x more MRR per month, not half. Both are fine trajectories — compression is normal.

Annualizing correctly

Common mistake: "5% MoM is 60% YoY." Wrong. 5% MoM geometric = (1.05)^12 − 1 = 79.6% YoY. The difference matters when you're pitching investors or projecting for board meetings.

• 1% MoM = 12.7% YoY
• 3% MoM = 42.6% YoY
• 5% MoM = 79.6% YoY
• 7% MoM = 125% YoY
• 10% MoM = 214% YoY
• 15% MoM = 435% YoY

Projecting forward

Once you have your CMGR, project forward: future MRR = current MRR × (1 + CMGR)^months. Treat this as ceiling, not guaranteed — growth rate decay, competition, and market saturation all compress it over time. For anything past 12 months, apply a decay curve: e.g., 5% MoM in months 1–12, 4% in 13–24, 3% in 25–36.

This is how top SaaS finance teams build bottoms-up projections. Linear extrapolation overstates. Compound projection with decay is the realistic view.