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SaaS Metrics Library
MRR Growth Rate Formula: Calculation, Benchmarks & Improvement Guide
Understand your MRR growth rate, calculate it with your own numbers, see what the published annual growth benchmarks show, and get practical tips to improve it.
MRR GROWTH RATE
No benchmark is published for the monthly rate.
Publishers survey annual growth, not monthly. A monthly benchmark is the twelfth root of an annual figure, which is arithmetic rather than a second measurement.
2026 benchmark · 1,000+ private B2B SaaS companies
This article will provide
- Calculation
- Benchmarks
- Improvement
What is MRR Growth Rate?
MRR Growth Rate is the percentage by which a company’s monthly recurring revenue (MRR) has increased or decreased over a certain period of time, most typically a quarter or a year.
How is MRR Growth Rate calculated?
MRR Growth Rate is calculated by dividing the revenue for the current period by the revenue from the prior period and then subtracting 1.
Both figures are monthly recurring revenue; see the MRR formula for how to calculate them.
For example, if a company had revenue of $100,000 in 2020 and $120,000 in 2021, its MRR Growth Rate would be calculated as follows:(120,000 / 100,000) – 1 = 0.2 = 20% Annual MRR Growth
In this example, annual figures are used. When revenue is calculated using just one month, the result is taken to the power of 12 to the get annualized result.
Try it with your numbers
$
$
Change in MRR: $20,000
20.0% MRR growth rate
What is the difference between recurring and non-recurring revenue?
Recurring revenue is received on a regular basis, such as each month, each quarter, or every year. It is more predictable and stable than non-recurring revenue, which tends to be one-off or less regular.
How is MRR Growth Rate used by SaaS companies, and what is a good MRR Growth Rate?
MRR Growth Rates vary widely by industry and company size, so the best indication of performance is frequently an internal comparison to prior quarter or prior year.
This being said, MRR Growth Rates are widely benchmarked.
And so, what are the MRR Growth Rate benchmarks?
The best MRR Growth Rates consider both the size of the SaaS business and their target customers.Ourarticle on 2022 MRR benchmarkshas full details.
This table provides a quick overview by company size, measured as annual revenue:
MRR growth rate benchmarks for 2026
Growth benchmarks are published as annual revenue growth, and the current median is the lowest in five years. The more useful question for 2026 is no longer how fast the median company grows, but what that growth costs to produce.
22%
Median annual revenue growth
1.67%
The same rate, compounded monthly
4 years
Of consecutive decline
25
Median Rule of 40, up from 15
The score improved. Growth did not.
Median Rule of 40 score.
15
Prior year
25
Latest
A ten-point gain in one year, and almost none of it came from growth. R&D fell from 35% to 27% of revenue and sales and marketing from 37% to 35%. The median company improved its score by spending less, not by selling more.
Rule of 40 by growth cohort
| Annual growth | Median Rule of 40 |
|---|---|
| Over 50% | 57 |
| 31–50% | 8 |
| Under 10% | 19 |
The shape here is the interesting part, and it is not a straight line. Companies growing 31–50% score worse than companies growing under 10%. That band is the expensive middle: fast enough to carry the cost base of a high-growth company, not fast enough for the growth to pay for it.
Where the margin came from
| Cost line | Prior year | Latest |
|---|---|---|
| R&D | 35% of revenue | 27% |
| Sales & marketing | 37% of revenue | 35% |
Reading an annual benchmark monthly
Benchmarks are published annually; MRR growth is managed monthly. A 22% annual rate compounds to 1.67% a month, not 1.83% — dividing by twelve overstates the target every month and the error compounds. To hit the median, the typical company needs roughly 1.7% of net new MRR every month, after churn and contraction.
Source: 2026 Aleph × Benchmarkit SaaS & AI Performance Benchmarks, published 1 June 2026, reporting full-year 2025 actuals from 342 B2B SaaS and AI-native companies. Rule of 40 was reported by 110 of them, so the growth-cohort bands sit on small samples. Growth medians are from SaaS Capital’s 2026 private B2B SaaS growth benchmarks, covering more than 1,000 private companies, with the 342-company Aleph × Benchmarkit sample used as a cross-check.
Explain the movement
See what is really driving MRR growth.
ScaleXP calculates MRR growth from live customer and finance data, then separates the movement into new business, expansion, contraction and churn.
Turn one growth percentage into a clear explanation of where recurring revenue was won, expanded or lost.
Automate Your SaaS MetricsExample MRR growth view
- Accounting: Xero, QuickBooks, Zoho Books
- Revenue: Contracts and invoices, plus CRM data with Xero or QuickBooks Online
Starting MRR
$100,000
The recurring revenue base at the beginning of the measurement period.
Illustrative example figures, not your live data.
| Annual revenue | 2020 | 2021 | 2022 |
|---|---|---|---|
| Less than $1M | 100% (12-177%) |
100% (26-300%) |
100% (46-286%) |
| $1M - $2.5M | 60% (31-100%) |
90% (45-300%) |
79% (37-153%) |
| $2.5 - $10M | 41% (22-84%) |
50% (30-100%) |
50% (30-115%) |
| $10M - $20M | 46% (25-71%) |
50% (20-75%) |
72% (30-101%) |
| $20M- $50M | 50% (18-75%) |
35% (25-49%) |
40% (30-52%) |
| More than $50M | 21% (14-40%) |
30% (10-56%) |
30% (18-55%) |
For historical context, the table above reports an earlier benchmarking study with data for 2020, 2021 and 2022. Identify the row matching your annual revenue: the bold figure is the average growth rate for companies of that size, with the lowest and highest quartiles either side. The 2026 benchmarks above are the current comparison.
MRR growth rate visualization example
This chart is an example of MRR growth rate, with year-on-year comparisons, making it much easier to see trends, improvements and seasonality.
ScaleXP fully automates MRR and MRR growth rate calculations. Using a series of smart test recognition algorithms, revenue is split into New, Lost, Upsells, and Downgrades.
Charts are built to show performance over time, by month, quarter, or year. This data makes it easier for SaaS companies to track performance and focus on driving performance, rather than data compilation.
Comparing MRR and subscription analytics tools? See our ChartMogul alternatives comparison.
Frequently asked questions
What monthly MRR growth rate matches the 2026 SaaS median?
An MRR growth rate of about 1.67% a month matches the 2026 median of 22% annual revenue growth for B2B SaaS, because monthly growth compounds over 12 months. Dividing the annual rate by 12 would set the monthly target too high. Growth has declined for four consecutive years, yet the median Rule of 40 rose from 15 to 25 thanks to margin discipline. ScaleXP calculates MRR growth rate automatically from accounting and CRM data, so finance teams can track monthly progress against an annual target with numbers that tie to the ledger.
Can ScaleXP calculate monthly recurring revenue growth automatically?
Yes, ScaleXP calculates monthly recurring revenue growth automatically from invoices in Xero or QuickBooks Online and customer data in HubSpot, Salesforce or Pipedrive. ScaleXP separates every movement into new business, expansion, contraction and churn, so finance can see what drove MRR growth each month. The metric is prepared daily alongside 30+ other SaaS metrics. Finance teams stop rebuilding growth calculations in spreadsheets and get an MRR growth rate that is consistent month after month.
How does ScaleXP explain changes in MRR growth rate to the board?
ScaleXP explains changes in MRR growth rate by breaking each period into new, expansion, contraction and churn MRR in live dashboards and PowerPoint board packs. Directors see whether growth came from winning customers or from expanding existing ones, and whether churn is holding it back. In presentation mode, the board can drill down to the customers behind every movement. Finance teams explain MRR growth before the board asks, with figures built from invoices in Xero, QuickBooks or Zoho Books.
How does ScaleXP keep MRR growth rate consistent with reported revenue?
ScaleXP keeps MRR growth rate consistent with reported revenue because MRR is built from the invoices and journals in Xero or QuickBooks, and one-off fees are excluded so they do not inflate growth. Revenue recognition schedules under IFRS 15 and ASC 606 sit alongside, so the link between recurring revenue and recognized revenue stays clear. Finance defines upgrades, downgrades and reactivations once, and ScaleXP applies the same rules every month. Boards and investors get growth figures that reconcile to the management accounts.
Get the 2026 SaaS benchmark report
Definitions, formulas, and this year’s median and top-quartile numbers for all 20 metrics in the library. One PDF you can take straight into your next board meeting.
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Explain MRR growth before the board asks.
ScaleXP shows more than the headline growth rate. See how much came from new customers, expansion, contraction and churn—and trace every movement back to the customers and transactions behind it.
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You may also be interested in
MRR – MONTHLY RECURRING REVENUE
A forward looking view of MRR, usually MRR plus new bookings less churn.
REVENUE GROWTH RATE
Percentage increase in revenue over a certain period of time, most typically a quarter or a year.
ARR – ANNUAL RECURRING REVENUE
Predictable revenue that a company can expect to receive on an annual basis.