Definition of Recurring Revenues

What does the term "recurring revenues" mean? What is meant by the term "recurring revenues"?

In order to define this term, let's break down the term into two separate words - "recurring" and "revenues".

"Recurring" is defined as "to show up again or repeatedly".

Revenues are defined as "income that a company receives from its normal business activities".

So, when you combine these two terms, you are left with income that shows up repeatedly. This is what is meant by the term "recurring revenues".

Let's give you a few examples of "recurring revenues".

Example #1. A software company sells annual licenses for its business software. At last glance, 30,000 different companies were paying for an annual license. This would qualify as "recurring revenues", as these revenues will show up year after year.

Example #2. A web site owner runs an investment newsletter that charges $19.95 per month. Subscribers are billed automatically every month. This would qualify as "recurring revenues" as the revenues occur again and again, month after month.


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