Annual Recurring Revenue
Is company operationally and financially predictable and stable?
Recurring revenue refers to the part of the revenue which is expected to repeat in defined future periods, most commonly due to open subscription. Unlike one-off sales, these revenues are predictable, often stable and can be counted on to occur at regular intervals going forward with a relatively high degree of certainty. Recurring revenue can appear in different forms across various industries like long-term contracts or renewing subscriptions. SaaS businesses live and die by the recurring revenue, and thus it is important to keep track of this metric.
We want to lower the risk that business will take a drastic turn from one month to the next.