Revenue Metrics

Expansion MRR

Additional monthly recurring revenue generated from existing customers through upgrades, seat additions, or usage growth.

Expansion MRR is the monetary measure of account growth within the existing customer base. When a customer adds seats, upgrades to a higher tier, or increases usage beyond their committed allocation, the incremental monthly charge becomes expansion MRR. It is the revenue component with the lowest marginal CAC because there is no customer acquisition effort required — only product adoption and, sometimes, a targeted customer success or sales play. Businesses with strong expansion MRR benefit from compounding: the same customers generate more revenue each month, which increases LTV without increasing acquisition spend. Tracking expansion MRR as a distinct component of the ARR bridge helps identify whether growth is being driven by new customer acquisition or by deepening relationships with existing ones — two very different businesses with different risk profiles.