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MRR is Monthly Recurring Revenue; MRR Growth Rate is the percentage by which a company’s revenue has increased or decreased over a certain period of time, most typically a quarter or a year.
MRR Growth Rate is calculated by dividing the revenue for the current period by the revenue from the prior period and then subtracting 1.
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 over a quarter, the result is multiplied by four to get an annual figure.
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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.
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.
The best MRR Growth Rates consider both the size of the SaaS business as well as their target customers. Our article on 2022 MRR benchmarks has full details.
This table provides a quick overview by company size, measured as annual revenue:
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%) |
To read the table, identify the row with annual revenue for your company. The three columns show data for 2020, 2021 and 2022. The number in bold is the average growth rate for SAAS companies of this size. The lower number is the MRR growth rate for the lowest performing quartile of companies while the highest number is the top quartile.
This chart is an example of customer churn rate, with year on year comparisons, making it much easier to understand trends, improvements, even 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.
A forward looking view of MRR, usually MRR plus new bookings less churn.
Percentage increase in revenue over a certain period of time, most typically a quarter or a year.
Predictable revenue that a company can expect to receive on an annual basis.
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