Revenue Growth Rate Formula: MoM and YoY Examples

The revenue growth rate formula comes in three variants, each telling a different story. Month-over-month 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 for the revenue growth rate, the ARR & MRR guide clarifies what belongs in each.

The revenue growth rate formula is identical regardless of time window:

Revenue Growth Rate = (Revenue_current - Revenue_previous) / Revenue_previous × 100

What changes is the period you compare. Monthly, quarterly, and yearly variants each serve a different purpose.

Month-Over-Month Revenue Growth Rate Formula

MoM Growth = (Revenue_this_month - Revenue_last_month) / Revenue_last_month × 100

Worked example: Your MRR was €8,200 in February and €8,900 in March.

MoM Growth = (8,900 - 8,200) / 8,200 × 100 = 8.5%

The month-over-month revenue growth rate 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 revenue 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 Revenue Growth Rate Formula

QoQ Growth = (Revenue_this_quarter - Revenue_last_quarter) / Revenue_last_quarter × 100

Worked example: Q1 MRR averaged €32,000. Q2 averaged €37,500.

QoQ Growth = (37,500 - 32,000) / 32,000 × 100 = 17.2%

The quarterly revenue growth rate 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 pace 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 Revenue Growth Rate Formula

YoY Growth = (Revenue_this_year - Revenue_last_year) / Revenue_last_year × 100

Worked 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%

The year-over-year revenue growth rate eliminates seasonality entirely. It’s the number that matters for fundraising decks, public benchmarks, and long-term planning. A SaaS posting 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.

Worked example: a full year of MoM data rolled up

Suppose you tracked MRR for twelve consecutive months: €8,200 in March, then €8,900, €9,400, €9,800, €10,500, €10,800, €11,400, €12,200, €12,800, €13,600, €14,500, and €15,300 by the following February. Your trailing-twelve-month revenue growth rate is (15,300 − 8,200) / 8,200 × 100 = 86.6%. That single number is more honest than averaging the twelve MoM percentages, because it captures real compounding rather than treating each month as an isolated sample. If you average the MoMs, you understate the trajectory. If you take the cumulative endpoints, you get the actual figure the business produced over the year. Always compute the YoY revenue growth rate from endpoints, never from a mean of monthly figures.

When to Use Each Revenue Growth Rate 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 revenue growth rate into a forward-looking projection, plug these numbers into a SaaS forecast model. Three inputs — current MRR, growth, 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.

The revenue growth rate naturally decelerates 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%). 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, see the SaaS growth benchmarks.

Common Mistakes in Revenue 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 revenue growth rate becomes meaningless. Growth 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. The revenue 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 revenue growth rate for SaaS?

A good month-over-month revenue growth rate for early-stage SaaS under €50k MRR sits in the 10–15% band. Pre-product-market-fit companies might see 15–20% in good months. As revenue scales past €100k MRR, a healthy MoM number typically slows to 5–10%, which still compounds to 80–150% annually, according to OpenView (2024) and SaaS Capital data.

How do I calculate the revenue growth rate if my SaaS is less than a year old?

You cannot calculate a true year-over-year revenue growth rate without twelve months of data. Use MoM growth instead and present a trailing three-month or six-month compound number to show trajectory. Annualizing a single month is misleading: wait until you have enough history for the figure to mean something.

Should I use MRR or ARR to calculate the revenue growth rate?

Use MRR for the month-over-month revenue growth rate and ARR for the year-over-year version. 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?

The 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-based growth 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 revenue growth rate calculations?

Use a year-over-year revenue growth rate instead of month-over-month. The YoY comparison covers 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.

What is a good revenue growth rate for bootstrapped SaaS?

For bootstrapped SaaS under $50k MRR, a 10–15% month-over-month revenue growth rate is strong. Above $100k MRR, a 5–8% monthly revenue growth rate is healthy. The revenue growth rate naturally decelerates as your revenue base grows: maintaining 10% monthly at $5k MRR is very different from maintaining it at $100k MRR. Compare against companies at your stage, not headline VC-backed numbers.

Should I measure the revenue growth rate monthly or annually?

Track both. A monthly revenue growth rate catches short-term trends and lets you react quickly. The annual version (year-over-year) smooths out seasonality and shows the bigger trajectory. For investor conversations and benchmarking, the annual figure is standard. For operational decisions, the monthly view is more actionable. See run rate for how to annualize current performance.

How does churn affect the revenue growth rate?

Churn directly reduces your net revenue growth rate. If you add $5k in new MRR but lose $3k to churn, your net revenue growth rate captures only $2k. This is why net revenue retention matters alongside the revenue growth rate: a company growing 10% monthly with 5% churn is in a very different position than one growing 10% with 1% churn. Always report net growth, not just new revenue added.

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