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If the user economics are not sustainable (ie. Either way, MRR growth is a great signal of growth.Īlthough MRR growth is a great signal of overall growth, it may not be a sign of sustainable growth.
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Perhaps your app acquired and onboarded new paying users this month, or you were able to upgrade users to a higher paying tier. Monthly recurring revenue is an important metric to measure and one you will want to see increase MOM. This is a powerful metric that indicates healthy, sustainable growth and retention rates. MRR is the amount of money your business consistently and predictably can expect to earn on a monthly basis. One metric that is common in SaaS and other subscription-based business models is monthly recurring revenue (MRR). What is Monthly Recurring Revenue (MRR) Growth? While 42% growth MOM is huge, the power of compounding becomes evident when you look back at the year and realize you grew 4,900%. This is a total percentage increase of 4,900%.
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Here is how to calculate the CMGR in your situation:Įvery month, on average, the number of active users increased by more than 42%.

You would use CMGR to find an average, versus calculating each month individually.Īt the end of month one, for example, you only acquired 100 users but by the end of month 12, you had 5,000 active users.
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What is Compounding Monthly Growth Rate (CMGR)?ĬMGR, or compounding monthly growth rate, is the average month-over-month growth over a longer-term duration, typically 6-18 months.ĬMGR = Measurement in Last Month/Measurement in First Month 1/ – 1Īs an example, let’s say you are a mobile marketer who wants to measure the growth of total users MOM for the full year since you launched your app. As you grow MOM and quarter over quarter, the power of compounding begins to take effect year over year. This calculation can be used to measure the growth of users, customers, revenue, employees, and much more. Here is how you would calculate the MOM percent increase: Percent increase (or decrease) = (Period 2 – Period 1) / Period 1 * 100Īs an easy example, let’s say your revenue grew from $100 in month 1, to $200 in month 2. The formula for calculating the percent increase of growth is: 31,240 The percentage increase over a given period is a measurement that signifies larger trends of growth marketing. Even if MOM growth is small, the benefits of compounding become clear rather quickly and contribute to exponential growth. The benefit of month-over-month growth is the power of compounding. As the period duration increases, such as with QOQ or YOY growth, the data becomes even more important as the time horizon offers reliable historical performance. Growth on a monthly basis is a great indicator of momentum in the short term. The finance team tracks expenses and revenue MOM, the product team tracks progress on feature requests, bug fixes, and usage MOM, and the marketing team tracks leads, conversions, retention, and more every single month.

Growth on a MOM basis is a common metric measured by most functions of a company, whether it’s finance, product, marketing, or sales. In this article, we cover MOM growth, teach you how to calculate, provide a calculator, and discuss which metrics are most important for mobile marketers to measure. Month-over-month, year-over-year, and quarter-over-quarter are all terms to measure rates of change and growth comparing two identical periods of time.įor example, how does revenue over this time period compare to a previous time period? This is where month-over-month (MOM) comes in as a valuable metric for growth marketers to understand.
