When the Annual Recurring Revenue from an existing customer increases, the proportionate rise is called expansion ARR. Common types of Expansion ARRs are 1) price expansion (ARR increased due to price rise) and 2) volume expansion (ARR increased as the customer uses more of a company’s product or service).
Suppose a client of Vareto - ABC Co. fetches an ARR of $100,000. If Vareto increases the price of its product/service by 10%, the ARR will rise to $110,000. Thus, Expansion ARR = $10,000.