Learn more about common financial (and startup) terms here. To learn more about Pilot, fill out the form below.
Net Expansion refers to the growth in revenue from existing customers, taking into account upgrades, downgrades, and churn. It’s a key performance metric that helps gauge the health of a business, particularly in a subscription-based model.
A positive net expansion rate indicates that the revenue gained from existing customers (through upselling, cross-selling, or price increases) exceeds the revenue lost through downgrades or churn. This demonstrates not only customer satisfaction but also the effectiveness of your customer success strategies. On the other hand, a negative net expansion rate signals that you're losing more revenue through downgrades and churn than you're gaining from existing customers, indicating a potential issue that needs addressing.
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