Upsell Monthly Recurring Revenue
Additional monthly recurring revenue from existing customers increasing their spend through upgrades, higher tiers, or add-ons.
◆ Currency
Formula
Built from
What it measures
The month-over-month positive change in MRR for customers who already had recurring revenue the prior period. Pure expansion — no new logos, no reactivated accounts, and no negative deltas. Summed across your base, it shows how much growth comes from making existing customers more valuable rather than from acquiring or replacing them.
Why it matters
Upsell MRR tells you whether your existing customer relationships are deepening. Operators track it because it's the cheapest revenue to book — you already have the relationship, the payment method on file, and product adoption underway. Strong, growing expansion is the clearest signal your product creates compounding value. It's also the engine behind Net Revenue Retention above 100%, which is what investors pay a premium for.
How to read it
Read Upsell MRR as a trend and as a share of starting MRR, never as a single number. Direction matters: is expansion growing month over month? Then compare it to your downsell and churn — if those outpace expansion, your net base is shrinking even when total MRR looks flat. Expansion that consistently exceeds your gross revenue churn is what pushes NRR above 100%. Watch for seasonality, since annual renewal cycles often concentrate upgrades.
What good looks like
Good
Upsell MRR is a meaningful and stable-to-growing share of starting MRR each month, driven by voluntary upgrades and add-on adoption, and large enough to push net revenue retention above 100%.
Watch
Expansion is shrinking as a share of starting MRR, or leaning on annual price hikes rather than genuine usage growth — a sign customers aren't finding enough value to spend more on their own.
Bad
Expansion is near zero or swamped by downgrades, so the existing base is net contracting — pointing to weak fit, poor adoption, or a packaging problem.
Watch-outs
- Counting new logos as expansion. If a customer had zero MRR last period and positive MRR this period, it's New MRR, not upsell. The prior-MRR-greater-than-zero rule protects you.
- Counting reactivations as upsell. A previously-churned customer who returns is reactivation (or new), not expansion — folding them in overstates how much your active base is growing.
- Double-counting add-ons. If a customer jumps a tier and buys an add-on in the same period, the full positive delta is one expansion number — don't book it twice.
- Confusing MRR expansion with ACV expansion. A customer signing a $12K ARR add-on contributes $1K of Upsell MRR, not $12K — normalize the annual figure to its monthly recurring amount.
Worked example
Hypothetical
Open the month with 50 existing customers at $100K total MRR. Customer A (was $500/mo) upgrades to $600 — that's +$100 of expansion. Customer B (was $1,000/mo) downgrades to $800 — that's downsell, not upsell. Customer C (was $800/mo) upgrades to $1,200, adding $400. Upsell MRR for the month is $100 + $400 = $500.