Recurring revenue is the predictable amount of income a business can expect to continue receiving in the future.
This metric is mostly used in subscription businesses and is tightly connected to the company's retention rate.
Unlike one-off sales, recurring revenue is consistent, predictable, regular and can be counted on with a high degree of certainty.
- Annual recurring revenue (ARR) represents the value of the recurring revenue normalized for a single calendar year.
- Monthly recurring revenue (MRR) is an amount of revenue that a company can expect to receive on a monthly basis.