Metrics for tracking expansion revenue

Sustaining scalable growth requires maximizing the recurring value that’s been extracted from existing customer accounts beyond baseline user acquisition. This relies on tracking metrics quantifying revenue expansion along multiple dimensions—from aggregate portfolio health signals such as renewal rates to usage-based indicators that point to granular upsell opportunities. Let’s explore some key metrics that will help guide your growth decisions.

Annual recurring revenue

Annual recurring revenue (ARR) represents the annual value expected from predictable, recurring customer subscriptions. This core metric forecasts the sustainability of long-term subscription income that’s immune to seasonal swings. For SaaS businesses, tracking ARR growth demonstrates scalability efficiency needing lower incremental sales costs to perpetuate revenue growth fueled primarily by renewals.

Real-world example

Cybersecurity leader...