Business Metrics

What is Expansion Revenue?

Definition

Additional revenue generated from existing subscribers through upgrades, add-ons, or increased usage beyond their initial plan.

Understanding Expansion Revenue

Expansion revenue is revenue growth from your existing customer base, without acquiring new customers. It includes plan upgrades, additional seat purchases, add-on features, and usage overage. For healthy SaaS companies, expansion revenue should offset churn — leading to net revenue retention above 100%.

Common expansion strategies include usage-based pricing tiers, premium feature add-ons, and team plan upgrades. For consumers, expansion revenue opportunities from your subscriptions mean more upsell prompts and encouragement to upgrade.

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