What is recurring revenue?
Recurring revenue is revenue that a company expects to receive on a regular, predictable basis — typically through subscriptions, service contracts or maintenance agreements — as opposed to one-time fees. Common metrics include Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR).
Recurring revenue is highly valued by investors because it provides forecastability and compounds with retention. Pure-recurring businesses (SaaS) command premium valuation multiples; hybrid models (recurring + transactional) split valuation accordingly.