{
  "version": "1.3.0",
  "releasedAt": "2026-05-20",
  "kpi": {
    "rogueId": "sales.expansion",
    "slug": "expansion",
    "domain": "sales",
    "defaultLabel": "Expansion ARR",
    "description": "Annualized recurring revenue added during the period from existing customers — through upsell (more seats / higher tier), cross-sell (additional products), or price increases. The \"farm\" line of the ARR waterfall. Boards read this as the leading indicator that product-market fit has translated into product-account fit and that the post-sale motion is creating compound growth. Common pitfall: classifying contractual price-step-ups (CPI escalators baked into the original contract) as expansion overstates new selling motion. Expansion CAC Ratio and Net Revenue Retention are derived from this number.",
    "fieldType": "currency",
    "unit": null,
    "maturity": "general",
    "suggestedForStages": [
      "seriesA",
      "seriesB",
      "seriesC",
      "public"
    ],
    "defaultOwningFunctions": [
      "Sales"
    ],
    "stageRelevance": {
      "seriesA": "core",
      "seriesB": "core",
      "seriesC": "recommended",
      "public": "recommended"
    },
    "definitionSource": {
      "tier": "editorial",
      "sourceName": "imboard Editorial",
      "sourceUrl": null,
      "sectionRef": null,
      "publicationDate": "2026-04-01",
      "attributionNotice": null
    },
    "formula": "Expansion ARR = (ARR from existing customers at period close) − (ARR from those same customers at period start) for the subset where the delta is positive. Excludes downgrades (tracked separately) and excludes new-logo bookings. Pre-contracted CPI escalators may or may not be treated as expansion — pick one convention per the company and apply it consistently.",
    "whyItMatters": "A high expansion line is the single best predictor of capital-efficient compounding growth — the SaaS playbook depends on existing customers expanding faster than new ones churn. Drives NRR, which is the metric public-market investors weight most heavily on the retention side of the model.",
    "interpretationGuidance": "Expansion ARR ≥ Churned + Downgrade ARR means NRR ≥ 100% (the \"leaky bucket gets refilled by upsell\" condition). Per KBCM/Sapphire SaaS Survey 2024 §Net Revenue Retention, median NRR is roughly 105–110% for $5M+ ARR SaaS — below 100% is a yellow flag at any stage; above 120% signals a category-leading account-expansion motion.",
    "relatedKpiIds": [
      "sales.arr",
      "sales.new_business",
      "sales.churn_arr",
      "sales.downgrades",
      "sales.expansion_cac_ratio",
      "customers.net_revenue_retention",
      "customers.gross_revenue_retention"
    ],
    "calculationPolicy": {
      "inclusionRules": [
        "Sum of (end-of-period ARR − start-of-period ARR) per customer, restricted to existing customers and to the subset where the delta is positive.",
        "Includes upsell (more seats, more capacity), cross-sell (additional products/modules), tier upgrades, and discretionary price increases negotiated mid-term.",
        "Disclose handling of contractual CPI escalators baked into the original contract — pick a convention (count or don't) and apply consistently."
      ],
      "exclusionRules": [
        "New-logo ARR — those are in `sales.new_business`.",
        "Customers who started the period with zero ARR (they're new logos, not expansions, even if they upgraded the same period).",
        "Negative deltas (downgrades) — those go in `sales.downgrades`.",
        "Renewals at the same price — those are retention, not expansion."
      ],
      "requiredInputs": [
        "Customer-level ARR snapshot at period start.",
        "Customer-level ARR snapshot at period end.",
        "Convention flag: are contractual CPI escalators counted as expansion?"
      ],
      "dataSourcePriority": [
        "Customer-level ARR ledger keyed by stable account ID (same source as NRR/GRR).",
        "CRM contract changelog as a fallback when the ledger isn't available."
      ],
      "edgeCases": [
        "Customer who upgraded AND downgraded different products in the same period: net the per-customer delta; if positive, count in expansion (only).",
        "Mid-period contract amendment: take the period-end ARR vs period-start ARR for the customer; don't double-book intermediate changes.",
        "Account mergers (parent acquires sub-customer): treat the consolidated entity as the new cohort; don't count the consolidation as expansion.",
        "Price-pack upgrade (Pro→Enterprise) at renewal: count the delta as expansion, not as renewal."
      ],
      "validationChecks": [
        "Expansion ARR ≥ 0 always.",
        "Per-customer expansion ≤ their period-end ARR (you can't expand by more than the customer pays).",
        "Sum of all expansion line items reconciles to the aggregate expansion number within 1%."
      ],
      "commonMiscomputations": [
        "Counting price-step-ups that were pre-contracted (CPI escalators) as expansion — inflates the selling-motion narrative without any actual sales activity.",
        "Including new-logo upsells (customer signed Tier 1 then upgraded to Tier 2 in the same period) as expansion — they're part of the new-logo motion.",
        "Netting downgrades against expansion at the customer level and reporting the net as \"expansion\" — they're different lines for a reason.",
        "Cohort drift: counting expansion from customers who weren't in the starting-period cohort. The cohort must be closed at period start.",
        "Counting renewal value as expansion — renewal at the same price is retention, not expansion."
      ]
    },
    "metricBasis": {
      "timeBasis": "period_flow",
      "moneyBasis": "contracted_arr",
      "dateBasis": "go_live",
      "production": "primary"
    }
  }
}