Expansion MRR is created by subscribers when:
Moving from a free plan to a priced plan
Moving from a lower-priced plan to a higher-priced plan
Purchasing of recurring add-ons
Reactivating a canceled subscription
How to calculate expansion MRR?
Expansion MRR (This Month) = Sum (Upgrades + Free to Paid Conversions + Reactivations) from last month to this month.
How should a business interpret expansion MRR?
An increase in this number indicates that the revenue generated from your existing customer base is growing. This is great news for your business, showing it’s growing without adding new customers, or without spending on acquiring new customers. More often than not an increase in expansion MRR can be tied back to a pricing change, or activities promoting customer success. Always try to keep this higher than the Gross MRR Churn metric.