Definition
Expansion revenue is new recurring revenue that comes from existing customers: plan upgrades, additional seats or usage, and add-ons. It doesn't include revenue from new customers.
Formula
Expansion MRR = recurring revenue added by existing customers in the period. Expansion is one input to net revenue retention, alongside contraction and churn.
Why it matters
When expansion outweighs churn, revenue grows even without new customers.
Product signals
Accounts approaching plan limits, adding active members or using higher-tier features are likely to expand. Track them per account.