Skip to content
Book a demo
Back to glossary

Revenue metrics

Expansion MRR

Additional recurring revenue from existing customers: upgrades, added seats, add-ons and contracted usage growth, excluding anything from new customers.

Expansion MRR is recurring revenue growth from customers you already had at the start of the period. Upgrades to a higher plan, seats added, add-ons purchased, and usage tiers crossed all count.

Expansion is what makes net revenue retention exceed 100%, and it is the cheapest revenue in the business: no acquisition cost, and a customer who has already decided you work.

Be careful with usage. A customer whose metered spend rises because they had a busy month has not expanded in a way you can count on, and treating it as expansion flatters the number and produces contraction next month when the spike passes. Most teams count usage as expansion only when the commitment or the tier changes.

Related terms

  • Contraction MRR Recurring revenue lost from customers who stayed: downgrades, removed seats, dropped add-ons and reduced commitments.
  • NRR (Net Revenue Retention) Revenue this period from a cohort of existing customers, divided by what that same cohort paid a year ago, including expansion, contraction and churn.
  • Net new MRR The month-over-month change in MRR, built from new, expansion, contraction and churned MRR. The single number that says whether the business grew.