Expansion Rate
How many of your existing customers are growing — the breadth of expansion, not just the dollars.
What is it?
Expansion Rate is the percentage of paying accounts that increased their subscription in a period — through an upgrade, extra seats or an add-on. Where expansion MRR measures the dollars, expansion rate measures how widespread the behaviour is across your base.
It is a read on how naturally your product drives growth from within. A high expansion rate means a large share of customers find reasons to pay you more; a low one often points to pricing tiers that do not give customers a clear next step.
How to calculate?
Divide the number of accounts that expanded by the number of paying accounts in the period. Eighteen expansions across a hundred and fifty paying accounts is a 12% expansion rate. Count accounts, not dollars — one large upgrade and one small one each count once.
Read it beside average expansion amount: the rate tells you how many customers are growing, the average tells you by how much, and you want both moving in the right direction.