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What is Expansion vs Contraction Ratio?

It’s how much bigger your expansion revenue is compared to your contraction revenue, shown as a percentage. If your Expansion MRR is $500 and your Contraction MRR is $250, the ratio is 200% — expansion is twice as large as contraction.

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How to Calculate It

Expansion vs Contraction Ratio = Expansion MRR / Contraction MRR × 100
Example: Ratio = $800 / $400 × 100 = 200%

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What to Aim For

  • Above 100% — Expansion is bigger than contraction. Good.
  • Below 100% — Contraction is bigger than expansion. Your existing customers are shrinking.
  • Much above 100% — Strong sign that customers are growing with you.
Bigdelta calculates this automatically from your billing data.