Question 1

What is a good MRR growth rate?

Accepted Answer

Early-stage SaaS should target 10-20% month-over-month growth. Growth-stage ($1M+ ARR) aims for 5-10% monthly. At scale, 3-5% monthly (36-60% annually) is considered strong. The 'triple triple double double double' framework targets 3x in years 1-2, 2x in years 3-5.

Question 2

What's the difference between MRR and ARR?

Accepted Answer

MRR (Monthly Recurring Revenue) is your normalized monthly revenue from subscriptions. ARR (Annual Recurring Revenue) = MRR × 12. ARR is used for valuation conversations; MRR for day-to-day growth tracking.

Question 3

What churn rate is acceptable for SaaS?

Accepted Answer

Best-in-class SaaS: < 0.5% monthly (6% annually). Good: 1-2% monthly. Problematic: > 3% monthly (30%+ annual). High-velocity self-serve products can tolerate slightly higher churn than enterprise-focused products.

Question 4

What does net new MRR include?

Accepted Answer

Net new MRR = New MRR (new customers) + Expansion MRR (upgrades) - Churned MRR (cancellations) - Contraction MRR (downgrades). Negative net new MRR means churn is outpacing growth.

SaaS MRR Calculator — Monthly Recurring Revenue Tool

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