Recurring revenue is the portion of a company’s revenue that is expected to continue in the future on a regular, predictable basis, typically weekly, monthly, or annually.

This type of revenue is not tied to one-time purchases but rather comes from ongoing relationships with customers who pay repeatedly for continued access to a product or service.

Types of recurring revenue:

• Monthly recurring revenue (MRR): Revenue earned each month from active subscriptions.
• Annual recurring revenue (ARR): Revenue normalized over a 12-month period from yearly contracts or subscriptions.
• Contractual recurring revenue: Income from fixed-term contracts billed at regular intervals.
• Usage-based recurring revenue: Revenue tied to customer usage patterns, but billed predictably (e.g., tiered SaaS plans).
• Service retainers or maintenance fees: Regular payments for ongoing support, upgrades, or consulting services.