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Recurring revenue explained: A complete guide for finance teams and founders
Recurring revenue models grow five to 10 times faster and boost valuations as investors favor predictable income from subscriptions and contracts, Brex reports.
- Brex, in a practical guide, defines recurring revenue as income from subscriptions, contracts, or membership fees rather than one-time purchases, highlighting its importance to investors and operators.
- Because forecasting becomes more reliable, companies can smooth fluctuations and let finance teams use cash flow forecasting to budget and invest knowing what arrives next month.
- Industry examples such as Adobe and Peloton demonstrate recurring revenue's payoff, with Adobe’s Creative Cloud quadrupling revenue and Peloton earning $1.67 billion subscriptions in FY2025.
- Market data show a valuation premium as investors and acquirers pay a premium for predictable revenue, with the median SaaS acquisition multiple at 4.1 times in 2024, about 57% higher than traditional software deals.
- Looking ahead, the subscription economy's scale and risks include growth from roughly $650 billion in 2023 to over $1.5 trillion by 2027, with churn, conversion, and revenue churn posing threats.
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15 Articles
15 Articles
Helena Independent Record+14 Reposted by 14 other sources
Recurring revenue explained: A complete guide for finance teams and founders
Brex reports that recurring revenue, a predictable income stream, is key for modern business growth and stability, outperforming traditional sales models.
·Helena, United States
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Total News Sources15
Leaning Left1Leaning Right0Center13Last UpdatedBias Distribution93% Center
Bias Distribution
- 93% of the sources are Center
93% Center
C 93%
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