How to Calculate Revenue Growth Rate (MoM, YoY)
Published on March 27, 2026 · Jules, Founder of NoNoiseMetrics · 7min read
Three formulas, three different stories. Month-over-month growth rate tells you if last month’s changes worked. Year-over-year tells investors whether the business is compounding. Here’s how to calculate each one — and which to use when.
What Is Revenue Growth Rate?
Revenue growth rate measures the percentage change in revenue between two periods. It answers one question: is this business growing, and how fast?
For SaaS, “revenue” almost always means MRR (Monthly Recurring Revenue) or ARR (Annual Recurring Revenue) — not total bookings, not one-time fees. If you’re unsure which base number to use, the ARR & MRR guide clarifies what belongs in each.
The company growth rate formula is identical regardless of time window:
Growth Rate = (Revenue_current - Revenue_previous) / Revenue_previous × 100What changes is the period you compare. Monthly, quarterly, and yearly variants each serve a different purpose.
Month-Over-Month Growth Formula
MoM Growth = (Revenue_this_month - Revenue_last_month) / Revenue_last_month × 100Worked example: Your MRR was €8,200 in February and €8,900 in March.
MoM Growth = (8,900 - 8,200) / 8,200 × 100 = 8.5%Month-over-month growth is the metric you check every week (or should be). It’s noisy — a single enterprise deal closing or a batch of annual renewals can swing the number dramatically. But that noise is useful. It forces you to understand what actually happened in the business that month rather than hiding behind averaged-out trends.
For early-stage SaaS (under €50k MRR), MoM is the default growth rate. Investors at the seed stage expect to see it in your updates. Once you cross ~€100k MRR, the month-to-month swings become less meaningful and quarterly or annual comparisons carry more weight.
Quarter-Over-Quarter Growth Formula
QoQ Growth = (Revenue_this_quarter - Revenue_last_quarter) / Revenue_last_quarter × 100Worked example: Q1 MRR averaged €32,000. Q2 averaged €37,500.
QoQ Growth = (37,500 - 32,000) / 32,000 × 100 = 17.2%Quarterly growth smooths out the monthly noise while still being recent enough to be actionable. It’s the sweet spot for board decks and investor updates past the seed stage. If your QoQ growth is consistently above 15%, you’re compounding at a rate that puts you in strong territory.
One subtlety: decide whether you’re comparing end-of-quarter MRR or average MRR across the quarter. End-of-quarter is simpler and more common, but average-quarter catches situations where a big deal closed on day one of the quarter and makes growth look artificially high at the end.
Year-Over-Year Growth Formula
YoY Growth = (Revenue_this_year - Revenue_last_year) / Revenue_last_year × 100Worked example: Your ARR was €96,000 in March 2025. It’s €142,000 in March 2026.
YoY Growth = (142,000 - 96,000) / 96,000 × 100 = 47.9%Year-over-year growth eliminates seasonality entirely. It’s the number that matters for fundraising decks, public benchmarks, and long-term planning. A SaaS growing at 48% YoY is roughly doubling every 18 months — strong for a bootstrapped company, expected for a venture-backed one.
YoY is also the fairest comparison if your revenue has seasonal patterns (B2B tools often see slower sign-ups in August and December). Comparing December to November looks like a disaster. Comparing December to last December gives you the real trajectory.
When to Use Each Revenue Growth Formula
The right formula depends on your stage and your audience.
| Situation | Best Formula | Why |
|---|---|---|
| Weekly founder check-in | MoM | Catches problems fast, shows impact of recent changes |
| Seed investor update | MoM | Expected format at early stage, shows velocity |
| Series A deck | QoQ + YoY | Smooths noise, shows sustained trajectory |
| Board meeting | QoQ | Actionable timeframe, aligns with quarterly planning |
| Benchmarking against peers | YoY | Industry reports use annual figures |
| Seasonal business | YoY | Eliminates calendar-driven fluctuations |
Early-stage founders often make the mistake of only tracking MoM. A single bad month looks catastrophic when it’s really just noise. If you have at least 12 months of data, start tracking YoY alongside MoM — it gives you the confidence to ignore short-term dips that don’t reflect a real trend.
For turning your historical growth rate into a forward-looking projection, plug these numbers into a SaaS forecast model. Three inputs — current MRR, growth rate, and churn — can predict your runway more accurately than a 30-tab spreadsheet.
Revenue Growth Rate Benchmarks
What is a good revenue growth rate? It depends entirely on your stage and funding model.
| Stage | MoM Growth | YoY Growth | Source |
|---|---|---|---|
| Pre-PMF (<€10k MRR) | 15–20% | N/A (too early) | First Round (2024) |
| Early (<€50k MRR) | 10–15% | 150–300% | OpenView (2024) |
| Growth (€50k–€500k MRR) | 5–10% | 80–150% | SaaS Capital (2024) |
| Scale (>€500k MRR) | 2–5% | 30–80% | Bessemer (2023) |
| Bootstrapped median | 5–8% | 60–100% | MicroConf / Indie Hackers surveys (2024) |
Note: Bootstrapped companies at 5–8% MoM growth are compounding at 80–150% annualized — often outperforming venture-backed peers who burn cash to hit similar numbers.
Growth rates naturally decelerate as revenue scales. A SaaS going from €5k to €10k MRR (100% growth) is not comparable to one going from €200k to €400k MRR (also 100% growth). The absolute dollar increase tells a very different story. Always pair percentage growth with absolute revenue context.
For a broader set of SaaS performance benchmarks beyond just growth rate, see the SaaS growth benchmarks.
Common Mistakes in Growth Rate Calculations
Mixing recurring and non-recurring revenue. If you include a one-time setup fee or consulting project in your revenue number, your growth rate becomes meaningless. Growth rate should be calculated on recurring revenue only — MRR or ARR.
Ignoring negative months. Some founders skip months where growth was negative and only report positive periods. This is dishonest and investors will catch it. If March was -3% and April was +12%, your two-month growth is the compound of both, not just the good month.
Annualizing too early. Taking one strong month and multiplying by twelve produces fantasy numbers. “We grew 20% last month, so we’re on track for 792% annual growth” is technically correct math and completely misleading. Wait until you have at least three to six months of data before annualizing anything.
Comparing gross revenue instead of net. Growth rate should reflect net revenue — after refunds, chargebacks, and discounts. A 15% MoM growth rate that includes €2,000 in refunded annual plans is overstating reality.
FAQ
What is a good month-over-month growth rate for SaaS?
For early-stage SaaS under €50k MRR, 10–15% MoM growth is considered strong. Pre-product-market-fit companies might see 15–20% in good months. As revenue scales past €100k MRR, healthy MoM growth typically slows to 5–10%, which still compounds to 80–150% annually, according to OpenView (2024) and SaaS Capital data.
How do I calculate YoY growth if my SaaS is less than a year old?
You can’t calculate a true year-over-year growth rate without twelve months of data. Use MoM growth instead and present a trailing three-month or six-month compound growth rate to show trajectory. Annualizing a single month’s growth rate is misleading — wait until you have enough history for the number to mean something.
Should I use MRR or ARR to calculate growth rate?
Use MRR for month-over-month calculations and ARR for year-over-year. They’re the same underlying data at different scales — ARR is just MRR multiplied by twelve. The important thing is consistency: pick one base metric and stick with it across all your reporting periods so comparisons are apples-to-apples.
What is the difference between revenue growth rate and MRR growth rate?
Revenue growth rate is a general term that can apply to any revenue stream. MRR growth rate specifically measures the change in monthly recurring revenue, excluding one-time charges, setup fees, and non-recurring income. For SaaS companies, MRR growth rate is the standard because it reflects the predictable, repeating revenue that determines the long-term value of the business.
How do I account for seasonality in growth rate calculations?
Use year-over-year comparisons instead of month-over-month. YoY growth compares the same calendar period across years, which neutralizes seasonal patterns like summer slowdowns or end-of-year budget freezes. If you don’t have twelve months of data yet, note seasonal context alongside your MoM numbers rather than pretending the dip doesn’t exist.
See your MoM revenue growth rate tracked automatically from Stripe — free up to €10k MRR →
Free Tool
Try the MRR Dashboard Template →
Interactive template — no signup required.