How to Calculate Recurring Revenue

A recurring-revenue estimate helps you understand the predictable part of monthly sales.

The basic formula

Monthly recurring revenue = recurring customers × average monthly recurring revenue per customer. If 10 customers each produce $100 per month, the estimate is $1,000 per month and $12,000 on a simple annualized basis.

Keep the estimate useful

Keep one-time projects separate from recurring revenue. For a detailed forecast, consider churn, upgrades, downgrades, discounts, refunds and different subscription tiers.