[What and Why:]

To strengthen protection against abuse and ensure fair use of Exchange Online resources, we are updating how the Tenant External Recipient Rate Limit (TERRL) quota is calculated for certain tenants.

These changes improve how quotas account for tenant age (how long the tenant has existed since creation), trial subscriptions, and educational organizations using free Education (EDU) licenses.

[Rollout Schedule:]

• General Availability (Worldwide): Rolling out beginning mid-September 2026

[Impact on Your Organization:]

Who is affected:

• Newly created tenants (first 60 days)
• Trial tenants
• Educational organizations with free EDU licenses

Platforms/Services:

• Exchange Online
• Exchange admin center (EAC)

What will happen:

TERRL quota calculations will change based on tenant status and licensing.

• New tenant quotas (based on tenant age):

  • Less than 31 days: 10% of standard calculated quota
  • 31–60 days: 25% of standard calculated quota
  • More than 60 days: 100% of standard calculated quota
• Trial tenants:
• Daily TERRL quota reduced from 5,000 to 500 external recipients
• Tenants with free EDU licenses (e.g. A1 licenses):
• New formula applied: 500 × (Purchased Email Licenses^0.7 + Free EDU Licenses^0.3) + 9500
• Free EDU licenses contribute to the quota at a lower weighting than purchased licenses
• Tenants without free EDU licenses:
  • Existing formula remains unchanged: 500 × (Purchased Email Licenses^0.7) + 9500

If a tenant exceeds its quota:

• Additional outbound messages to external recipients will be blocked until usage falls below the rolling 24-hour limit
• Senders will receive one of the following Non-Delivery Reports (NDRs):
• Trial tenants: 550 5.7.232 — Message blocked due to trial tenant external recipient limit
• Non-trial tenants: 550 5.7.233 — Message blocked due to tenant external recipient limit

[Action Required / Recommendations:]

No immediate action is required.

Recommended actions:

• Review the Tenant Outbound External Recipients Rate report in the Exchange admin center: EAC > Reports > Mail flow > Tenant Outbound External Recipients Rate.
• Monitor:
  • Current TERRL quota
  • Outbound recipient volume
  • Percentage of quota consumed
  • Blocked recipients (if any)
  • TERRL enforcement status
• If your organization regularly operates near or above quota consider migrating high-volume, application-driven outbound email to a third-party bulk email service or purchasing more licenses to cover your volume needs.

Learn more: Introducing Exchange Online Tenant Outbound Email Limits

[Compliance considerations:]

No compliance considerations identified, review as appropriate for your organization.