freeonlinecal

FreeOnlineCal

MRR Growth Rate Calculator

Enter the Monthly Recurring Revenue from the previous month.
Enter the Monthly Recurring Revenue for the current month.

MRR Change:

0

MRR Growth Rate:

0%

Understanding MRR Growth Rate

The Monthly Recurring Revenue (MRR) Growth Rate is a key metric for subscription-based businesses. It measures the percentage increase or decrease in your MRR over a specific period, typically month-over-month. A positive growth rate indicates that your business is expanding its recurring revenue, while a negative rate suggests a decline.

How to Calculate MRR Growth Rate

Calculating your MRR growth rate involves comparing your current month's MRR to the previous month's MRR. The result is expressed as a percentage, showing how much your recurring revenue has grown or shrunk.

The Formula

The formula for MRR Growth Rate is:

MRR Growth Rate = ((Current Month MRR - Previous Month MRR) / Previous Month MRR) * 100

Example Scenario

Let's say your business had an MRR of $10,000 in January and $12,000 in February. Here's how you would calculate the MRR Growth Rate:

  1. Identify Current Month MRR: February MRR = $12,000
  2. Identify Previous Month MRR: January MRR = $10,000
  3. Subtract Previous from Current: $12,000 - $10,000 = $2,000
  4. Divide by Previous Month MRR: $2,000 / $10,000 = 0.2
  5. Multiply by 100 to get Percentage: 0.2 * 100 = 20%

In this example, your MRR Growth Rate is 20%.

What Your Results Mean

The MRR Growth Rate provides insight into the health and trajectory of your subscription business:

  • Positive Growth Rate: Indicates that your recurring revenue is increasing, which is generally a sign of a healthy and expanding business.
  • Negative Growth Rate: Suggests that your recurring revenue is declining, which could be due to high churn, low new customer acquisition, or downgrades. This signals a need for strategic adjustments.
  • Zero Growth Rate: Means your MRR has remained stagnant, indicating neither growth nor decline.

Monitoring this metric regularly helps businesses understand their performance, identify trends, and make informed decisions to drive sustainable growth.



Related Calculators