Expansion MRR is the additional Monthly Recurring Revenue generated from existing customers through upgrades, cross-sells, add-ons, and seat increases.
What is Expansion MRR?
Expansion is the cheapest revenue you can earn — no new acquisition cost — and it's what powers net revenue retention above 100%. Businesses with strong expansion can grow even if they stop acquiring new logos.
How to calculate Expansion MRR
Worked example
An existing customer upgrades from a $500/mo plan to $800/mo and adds a $100/mo add-on. Their contribution to Expansion MRR is $300 + $100 = $400.
What's a good Expansion MRR?
Top SaaS companies drive 30%+ of new revenue from expansion and achieve net revenue retention of 120%+ on that strength.
Frequently asked questions
Is expansion MRR the same as upsell?
Upsell is one source of expansion (moving to a higher tier). Expansion also includes cross-sell and seat/usage growth.
Why is expansion revenue so valuable?
It carries little to no acquisition cost and signals genuine product value, which makes it the most profitable and most durable form of growth.
Related metrics
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