Definition
Expansion MRR is added recurring revenue from existing customers (upsells, upgrades, seat growth, add-ons). It drives high NRR.
How to use it
- Track expansion MRR by cohort and segment to find repeatable expansion.
- Separate expansion from reactivations and price increases for clean reporting.
Common mistakes
- Counting expansion as retention without also tracking GRR (NRR can hide churn).
- Mixing price-driven expansions with true usage expansion (separate when possible).
Why this matters
This term matters because small changes compound in SaaS metrics. Use consistent definitions by cohort and segment so you can diagnose retention, payback, and growth quality.
Practical checklist
- Write a 1-line definition for "Expansion MRR" that your team will use consistently.
- Keep the time window consistent (weekly/monthly/quarterly) when comparing trends.
- Segment results (channel/plan/cohort) before drawing big conclusions from blended averages.
- Use a calculator that references this term (e.g., NRR Calculator) to sanity-check assumptions.
- Read the related guide (e.g., NRR (Net Revenue Retention): definition, formula, how to calculate) for context and common pitfalls.
Where to use this on MetricKit
Calculators
- NRR Calculator: Calculate Net Revenue Retention (NRR) from starting MRR and revenue movements.
- NRR vs GRR Calculator: Calculate NRR and GRR together from the same starting MRR and expansion/contraction/churn inputs.
- MRR Forecast Calculator: Forecast MRR over time using new MRR plus expansion, contraction, and churn rates.
- Revenue Retention Curve Calculator: Model GRR and NRR over time from monthly expansion, contraction, and churn assumptions (existing cohort only).
- Cohort Payback Curve Calculator: Estimate when a cohort pays back CAC using a simple retention curve (two-stage churn) and optional expansion.
Guides
- NRR (Net Revenue Retention): definition, formula, how to calculate: NRR explained: what net revenue retention measures, the NRR formula, how to calculate it by cohort, and common mistakes.
- Retention & churn hub: cohorts, GRR/NRR, and retention curves: A practical hub for retention measurement: churn rate, GRR/NRR, cohort retention curves, and how to set retention targets without getting misled by noise.
- NRR vs GRR: differences, formulas, and how to use both: NRR includes expansion; GRR excludes it. Learn when each metric matters, how to compute both from the same cohort, and how to interpret the gap.
- MRR forecasting: a simple bridge model (new, expansion, churn): A practical way to forecast MRR using a monthly bridge: starting MRR + new MRR + expansion - contraction - churn.
- Revenue retention curves: GRR vs NRR over time (how to model): A practical guide to revenue retention curves: how GRR and NRR compound, how to interpret expansion vs churn, and how to avoid common mistakes.