Smoothed MRR Growth Rate (L3M)
Growth with the noise removed — a three-month average that shows the trend, not the wobble.
What is it?
Smoothed MRR Growth Rate is your growth rate with the noise removed — typically a three-month average — so you see the underlying trend instead of the month-to-month wobble. Raw growth bounces around on timing and one-off deals; the smoothed version tells you where you actually are.
It trades responsiveness for reliability. A single big month will not spike it and a single quiet one will not tank it, which makes it the better input for forecasting and for any metric that compounds off the growth rate.
How to calculate?
Average the monthly MRR growth rate over the trailing three months, or compute it directly from MRR three months apart. The result lags a genuine turn slightly, but that lag is the price of filtering out noise you would otherwise overreact to.
Use the smoothed rate to feed annualized growth and months-to-double, and keep the raw rate for spotting the moment a real inflection begins.