Free Net Expansion Rate Calculator

Quick answer

Net expansion rate measures how expansion MRR compares with contraction and churn inside the existing customer base. It is the change component behind NRR.

Formula

Net expansion rate = (expansion MRR − contraction MRR − churned MRR) ÷ beginning MRR × 100

Example

With $500,000 beginning MRR, $30,000 expansion, $8,000 contraction, and 2,000 churn, net expansion rate is 2%. NRR is therefore 102%.

How to interpret it

Positive net expansion means the installed base is growing in recurring revenue before new customers are added. Segment the drivers before deciding whether to focus on upsell, downgrade reduction, or churn.

Methodology, assumptions and limitations