Month-over-Month
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Month-over-Month
What is Month-over-Month?
Month-over-Month (MoM) is a form of comparison where an organization compares a particular business metric in one month to that of the prior month. It gives an indication of how a business metric has grown within a relatively short span of time.
If a business earned $50,000 in the month of January and $55,000 in February, then the month-over-month growth would be 10%.
The MoM approach is widely used when comparing revenue, sales, expenses, website traffic, number of customers, and subscriptions.
How is Month-over-Month Calculated?
The MoM is calculated using the formula:
| MoM Growth = [(Current Month Value − Previous Month Value) ÷ Previous Month Value] × 100 |
For example, if monthly sales increased from $40,000 to $48,000:
MoM Growth = [($48,000 − $40,000) ÷ $40,000] × 100 = 20%
The business therefore experienced 20% month-over-month growth in sales.
What is MoM Used For?
MoM is utilized to analyze nearly all business metrics that are repeating in nature, not only revenues:
- Revenues and recurring revenue (including MRR for subscription companies)
- Expenses and burn rate
- Number of customers/users (signups, active users, churn rate)
- Website/app traffic and engagement
- Cash balance
Use of MoM in Finance and SaaS
The MoM metric is particularly prevalent in SaaS and subscription companies, where MoM is the standard measure for tracking:
- MRR (Monthly Recurring Revenue) growth: How much MRR has grown or declined on a MoM basis, which may be further split into new, expansion, and churned MRR
- Customer churn rate: The proportion of customers that have been lost between months
- Changes in CAC (Customer Acquisition Cost): Whether the cost of acquiring a customer is going up or down each month
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