Net Monthly Recurring Revenue (MRR) Growth Rate

Net Monthly Recurring Revenue (MRR) Growth Rate is the net percentage change in Monthly Recurring Revenue (MRR) from one month to the next. The calculation incorporates all sources of MRR change: new MRR from new customers, expansion MRR from upgrades or cross-sells, contraction MRR from downgrades, and churned MRR from lost customers.

A positive net MRR growth rate indicates that a company is adding more recurring revenue than it is losing, signaling a healthy, growing business. Conversely, a negative rate suggests the business is shrinking. Unlike gross MRR growth, which only considers new revenue, the net calculation gives a more holistic picture of performance by factoring in the impact of the churn rate.

Monitoring this metric is essential for strategic and financial planning, helping leaders understand the effectiveness of sales, marketing, and customer success initiatives. It is often analyzed alongside other key SaaS metrics like Net Revenue Retention (NRR) and Customer Lifetime Value (CLV) to assess long-term viability and growth potential.