Recurring revenue

Predictable revenue that repeats on a contracted basis.

Definition

Recurring revenue is income expected to continue at a predictable interval, typically expressed as monthly (MRR) or annual (ARR) recurring revenue. It excludes one-off fees and usage spikes.

Why it matters

Recurring revenue is the base a forecast can rest on. Businesses are valued substantially higher on recurring revenue than on equivalent one-off revenue, because it is predictable.

Related terms

• churn rate
• deferred revenue
• forecast accuracy