How is expansion MRR calculated?

Modified on: Mon, 30 Aug, 2021 at 2:02 PM

Expansion MRR

Additional Monthly Recurring Revenue earned from existing Subscriptions.
Explanation of metric
  • A trend line depicting the additional Monthly Recurring Revenue generated from your existing Customers when they upgrade, purchase Addons, or move from free to paid Plans.
  • It is a point in time indicator of current Expansion MRR. It also displays variance with respect to the previous periods and percentage variances of MRR across different periods.
How it's measured
Expansion MRR = [(Increase in Total MRR due to Upgrades) + (Free to Paid MRR) + (Reactivations) + (PAUSE To Paid MRR)]


Note: Does not include IN TRIAL to ACTIVE conversions.
Reading

Up: Good

Interpretation
  • An increase in this metric indicates that the revenue generated from your existing Customer base is growing. This is great news as the business is growing without adding new Customers, or without spending on acquiring new customers. It is recommended to keep Expansion MRR higher than the Gross MRR Churn metric.
  • Example: In a given period, Total MRR at the beginning of the month is $2000 and there are Upgrades, Cross-sells and Addons during the period and Total MRR plummeted to $3000 at the end of the month.
    Expansion MRR rate = [(3000-2000)/2000] x 100 = 50%.

Click here to know about other metrics.

M
Monica is the author of this solution article.

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