What is expansion revenue in SaaS?

Expansion revenue (or expansion MRR) is the additional recurring revenue generated from existing customers through upsells, cross-sells, add-ons, and seat expansions. It's a key component of Net Dollar Retention and indicates how well you're growing revenue without acquiring new customers. Top SaaS companies generate 20-40% of their growth from expansion revenue.

How do you calculate expansion revenue rate?

Expansion Revenue Rate = (Expansion MRR / Beginning MRR) × 100. For example, if you started the month with $100,000 MRR and generated $8,000 in expansion revenue, your expansion rate is 8%. This can be calculated monthly or annually.

What is a good expansion revenue rate?

A good expansion revenue rate varies by company stage and model: Early-stage SaaS (Series A/B): 3-5% monthly expansion is solid. Growth-stage SaaS: 5-8% monthly is strong. Enterprise SaaS: 8-12%+ monthly is achievable with land-and-expand. PLG companies often see higher rates (10%+) due to viral seat expansion.

What's the difference between expansion MRR and net new MRR?

Expansion MRR only counts additional revenue from existing customers (upsells, cross-sells, add-ons). Net New MRR = New MRR + Expansion MRR - Churned MRR - Contraction MRR. Expansion MRR is a subset of net new MRR and specifically measures your ability to grow existing accounts.

How does expansion revenue affect Net Dollar Retention (NDR)?

Expansion revenue directly increases NDR. NDR = (Starting MRR + Expansion - Contraction - Churn) / Starting MRR × 100. If your expansion exceeds churn + contraction, you'll have NDR over 100%, meaning you grow revenue even without new customers. Best-in-class SaaS companies achieve 120-140% NDR primarily through strong expansion.

What are the main sources of expansion revenue?

The four primary sources are: 1) Upsells - customers upgrading to higher-tier plans, 2) Cross-sells - customers buying additional products, 3) Add-ons - customers purchasing extra features or modules, 4) Seat/usage expansion - customers adding more users or increasing usage-based billing. Most SaaS companies see 60-70% from upsells and seat expansion.

Expansion Revenue Calculator

Calculate your expansion MRR from upsells, cross-sells & add-ons. Get instant benchmarks vs top SaaS companies + AI-powered growth recommendations.

Enter Your Values

Beginning MRR*

Your total Monthly Recurring Revenue at the start of the period

Upsell Revenue

Additional MRR from customers upgrading to higher-tier plans

Cross-sell Revenue

MRR from customers purchasing additional products or modules

Add-on Revenue

MRR from customers buying extra features, integrations, or services

Seat/Usage Expansion

Additional MRR from customers adding users or increasing usage

Churned MRR

MRR lost from customers who cancelled completely

Contraction MRR

MRR lost from customers downgrading (but not churning)

Formula

Expansion MRR = Upsell + Cross-sell + Add-ons + Seat Expansion

Total expansion revenue combines all sources of additional revenue from existing customers. The expansion rate shows this as a percentage of your starting MRR, making it comparable across company sizes.

Total Expansion MRR$11,500

11.5% expansion rate — Excellent! Top-tier PLG/enterprise performance.

Monthly Expansion Rate11.5%

Annualized Expansion Rate269.2%

Net Dollar Retention (NDR)106.5%

Expansion vs Churn Ratio2.30x

Projected Annual Expansion$138,000

Upsells (43%)$5,000

Cross-sells (17%)$2,000

Add-ons (13%)$1,500

Seat/Usage (26%)$3,000

Expansion Health Score85/100

+10% Expansion → NDR107.7%

+25% Expansion → NDR109.4%

How Does Your Expansion Rate Compare?

Needs WorkBelow 3% — limited growth from existing customers

< $3

Average3-6% — typical for early-stage SaaS

$3 – $6

Strong6-10% — above median, healthy expansion

$6 – $10

Excellent10-15% — enterprise/PLG performance

$10 – $15

Best-in-Class15%+ — top-tier expansion motion

> $15

Source: OpenView SaaS Benchmarks 2024, KeyBanc Survey

How to Calculate Expansion Revenue

Enter your Beginning MRR — your total Monthly Recurring Revenue at the start of the period
Enter Upsell Revenue — additional MRR from customers upgrading plans
Enter Cross-sell Revenue — MRR from customers buying additional products
Enter Add-on Revenue — MRR from extra features, integrations, or services
Enter Seat/Usage Expansion — MRR from customers adding users or increasing usage
Optionally enter Churned and Contraction MRR to see Net Dollar Retention
View your total expansion MRR, expansion rate, and NDR instantly
Compare against SaaS industry benchmarks
Chat with our AI SaaS Analyst for personalized expansion strategies

SaaS Expansion Revenue Benchmarks

8-12%

Top-Quartile Monthly Expansion Rate

3-5%

Median SaaS Expansion Rate

10-15%

Enterprise SaaS Expansion Rate

12-20%

PLG Company Expansion Rate

30-40%

Expansion as % of Growth (Best-in-Class)

>110%

Target NDR for Series B+

Source: OpenView SaaS Benchmarks 2024, KeyBanc SaaS Survey