Compounded Monthly Growth Rate (CMGR)

Compounded Monthly Growth Rate (CMGR) measures the consistent month-over-month growth rate needed to achieve a specific value over a period. It smoothens out volatility in growth and offers a reliable metric for tracking consistent performance, especially for startups and recurring revenue models.

Formula:

CMGR (%) = [(Ending Value / Starting Value) ^ (1 / Number of Months) – 1] × 100

Importance:

  • Illustrates growth momentum over time.

  • Helps in revenue and customer forecasting.

  • Often tracked alongside burn rate and CAC.

Example:

A SaaS startup in Sharjah growing MRR from AED 50,000 to AED 1,00,000 in 6 months has a CMGR of roughly 12.2%.