Expansion Monthly Recurring Revenue (Expansion MRR) tracks the increase in recurring revenue that comes from your current customers spending more on your product or service. This typically happens when users upgrade their plans, purchase premium features, expand usage, or add more users to their subscription. It is a strong signal that your customers are finding increasing value in what you offer.
Step 1: Review the list of existing customers who made changes to their subscriptions during the month by upgrading their plans, adding new features, or increasing usage limits.
Step 2: Determine the exact increase in monthly recurring revenue from each customer due to those upgrades or additions.
Step 3: Add up all the incremental revenue from these expanded subscriptions to calculate your total Expansion MRR.
Step 4: Use the formula: Expansion MRR = Sum of Additional Recurring Revenue from Existing Customers
Example: If three customers increase their monthly payments by $150, $200, and $250 respectively, then:
Expansion MRR = $150 + $200 + $250 = $600
Expansion MRR = Σ (Additional Recurring Revenue from Plan Upgrades, Add-Ons, or Usage Expansions)
This figure reflects only the increase in recurring charges from customers who were already active, not total contract value or revenue from new sign-ups.
Strong Expansion MRR is often expected to neutralize or exceed Churned MRR, helping maintain consistent net growth. Many SaaS businesses aim for expansion to contribute significantly to overall monthly revenue gains, with high-growth companies often seeing 20%–30% of MRR growth driven by expansions.
Expansion revenue is also a major contributor to Net Revenue Retention (NRR) above 100%, which indicates growth from existing customers even without acquiring new ones.
Revenue brought in by new customers who subscribed during the month.
The overall monthly revenue change calculated from new, expansion, and churned MRR.
A metric that shows how much revenue is retained or grown from current customers after accounting for churn and expansion.
The total projected income from a customer throughout their lifecycle, which increases as expansion occurs.
Learn How to Maximize Expansion MRR with DiGGrowth Today at info@diggrowth.com — we’ll get back to you promptly.
No. It only includes additional recurring revenue from customers who were already active before the month began.
Because it measures organic growth from your existing base, generally a more cost-effective and sustainable growth path than acquiring new customers.
Common triggers include plan upgrades, new feature purchases, usage-based scaling, or account growth (e.g., more users added).
High Expansion MRR can compensate for losses due to churn and help lift Net Revenue Retention, improving long-term financial stability.
In some cases, yes. For mature businesses with strong product-market fit, expansion can drive a large share of total growth, reducing reliance on new acquisition.