CAGR vs MRR
CAGR (Compound Annual Growth Rate) and MRR (Monthly Recurring Revenue) both come up in business conversations and get confused. Here's the plain-English difference, side by side, so you can use each one with confidence.
The key difference: CAGR refers to compound annual growth rate, while MRR refers to monthly recurring revenue — they describe different things even when they show up in the same sentence.
CAGR — Compound Annual Growth Rate
The mean annual growth rate of an investment over a specified time period longer than one year.
MRR — Monthly Recurring Revenue
The predictable revenue a business earns each month from subscriptions or contracts.
When to use CAGR
Reach for "CAGR" when the conversation is specifically about compound annual growth rate. The mean annual growth rate of an investment over a specified time period longer than one year.
When to use MRR
Reach for "MRR" when the conversation is specifically about monthly recurring revenue. The predictable revenue a business earns each month from subscriptions or contracts.
FAQs
What is the difference between CAGR and MRR?
CAGR stands for Compound Annual Growth Rate — The mean annual growth rate of an investment over a specified time period longer than one year. MRR stands for Monthly Recurring Revenue — The predictable revenue a business earns each month from subscriptions or contracts.
Are CAGR and MRR the same thing?
No. They're often used in the same conversation because they're related, but they describe different concepts. CAGR = Compound Annual Growth Rate. MRR = Monthly Recurring Revenue.
When should I use CAGR vs MRR?
Use CAGR when you're specifically referring to compound annual growth rate. Use MRR when the topic is monthly recurring revenue.