Expansion Revenue
Expansion revenue is the additional recurring revenue generated by existing customers through upgrades, extra seats, usage growth or add-on purchases. It is the engine behind any NRR figure above 100%.
Formula
Worked example
If 14 existing customers upgrade in March adding $4,200 of MRR while nobody downgrades, expansion MRR is $4,200 — roughly the same growth as ~50 new self-serve signups, at near-zero acquisition cost.
Expansion is the cheapest revenue a SaaS business will ever acquire: no CAC beyond a success team's time, and it lands with proven willingness to pay. Companies with strong expansion motions (usage-based pricing, seat growth, tiered features) can sustain 115%+ NRR.
Keep reactivation separate: a churned customer returning is not expansion, and mixing the two overstates how well the live base is growing.
Compute it: NRR calculator