MRR Growth Rate
The percentage change in recurring revenue period over period — the number investors instinctively annualise.
What is it?
MRR Growth Rate is the percentage change in your total recurring revenue from one period to the next. Where net new revenue gives you the change in dollars, growth rate gives you the change in proportion — so the same $5,000 gain reads very differently on a $20,000 base than on a $2m one.
It is the metric investors instinctively annualise. A steady monthly rate compounds, so small differences — 4% versus 6% a month — become enormous gaps over a year. Reporting it consistently, always on the same period basis, matters more than any single reading.
How to calculate?
Subtract last period's MRR from this period's, then divide by last period's MRR. Growing from $23,200 to $24,100 is a monthly growth rate of about 3.9%. Use the same cadence every time — monthly and annual rates are not interchangeable, and mixing them is the most common way this metric misleads.
Because it is a ratio, growth rate naturally slows as the base gets larger even when dollar growth is steady — the law of large numbers, not a failing business. Pair it with net new revenue so you can tell a maturing company from a stalling one.