Expansion Revenue

Definition

Additional revenue from existing customers (upsells, cross-sells, increased usage), the metric investors worship because it supposedly indicates product value and customer satisfaction.

Example Usage

Our expansion revenue was 30% of new bookings, which management celebrated until we realized it was mostly customers being surprised by overage charges rather than consciously upgrading.

Origin

From SaaS business model metrics

Fun Fact

Strong expansion revenue suggests product-market fit, but for many startups it's actually evidence of unclear pricing architecture

Source: SaaS business model terminology

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