Which ARR component is directly increased by cross-sell within existing customers?

Which ARR component is directly increased by cross-sell within existing customers?

• A. Expansion ARR.
• B. Starting ARR.
• C. Churn ARR.
• D. Contraction ARR.

Answer: (A)

Cross-sell within existing customers directly increases expansion ARR because it adds new value to an already paying relationship, boosting the annual contract value those customers contribute. Expansion ARR is the portion of ARR growth that comes from existing customers through upsell, cross-sell, or price increases. Starting ARR is the revenue at the beginning of the period from initial bookings; churn ARR and contraction ARR reflect losses or downgrades, not gains. So when a customer buys an additional product or module, the expansion ARR rises accordingly—e.g., a $20k add-on bumps expansion ARR, while starting ARR remains unchanged unless the contract itself is renegotiated.

Cross-sell within existing customers directly increases expansion ARR because it adds new value to an already paying relationship, boosting the annual contract value those customers contribute. Expansion ARR is the portion of ARR growth that comes from existing customers through upsell, cross-sell, or price increases. Starting ARR is the revenue at the beginning of the period from initial bookings; churn ARR and contraction ARR reflect losses or downgrades, not gains. So when a customer buys an additional product or module, the expansion ARR rises accordingly—e.g., a $20k add-on bumps expansion ARR, while starting ARR remains unchanged unless the contract itself is renegotiated.