Expansion MRR is the additional monthly recurring revenue generated from existing customers through upgrades, seat additions, add-on purchases, or moving to a higher pricing tier — without acquiring any new accounts.
It is often the cheapest revenue to win because these customers already trust the product. Best-in-class SaaS teams aim for expansion MRR to outpace new-logo MRR within 2–3 years, at which point the business can grow even with flat new customer acquisition. Expansion MRR is tracked separately from new MRR to measure the health of the upsell and expansion motion.