What is Expansion MRR?
Additional recurring revenue from existing customers.
How to calculate it
Calculate Expansion MRR as: MRR gained from upsells & cross-sells. Pull the inputs from your connected data and track the trend over time in your dashboard.
Examples
Example 1
Existing customers upgrade, adding $4,000 MRR this month -- high-margin growth with no new acquisition.
Example 2
Existing customers upgrade tiers and add seats, contributing $5,000 in new MRR this month with zero acquisition cost, lifting NRR above 100%.
Why it matters
Expansion MRR is the additional recurring revenue from upsells and cross-sells to existing customers and is the cheapest, highest-margin source of growth. Because it requires no new acquisition, it improves unit economics and is a key driver of net revenue retention above 100%. Counting reactivations as expansion overstates it.
Benchmark context
A healthy SaaS business often sources 20-30% of new MRR from expansion; the more your NRR exceeds 100%, the more expansion is contributing.
Common pitfalls
Counting reactivations as expansion.
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