{"id":251630,"date":"2021-08-23T00:00:00","date_gmt":"2021-08-23T04:00:00","guid":{"rendered":"https:\/\/www.servicexrg.com\/blog\/recurring-revenue-rate\/"},"modified":"2026-01-15T16:44:24","modified_gmt":"2026-01-15T21:44:24","slug":"recurring-revenue-rate","status":"publish","type":"post","link":"https:\/\/www.servicexrg.com\/blog\/recurring-revenue-rate\/","title":{"rendered":"Recurring Revenue Rate"},"content":{"rendered":"<div class=\"et_pb_row_inner et_pb_row_inner_0\">\n<div class=\"et_pb_column et_pb_column_4_4 et_pb_column_inner et_pb_column_inner_0 et-last-child\">\n<div class=\"et_pb_module et_pb_text et_pb_text_0 et_pb_text_align_left et_pb_bg_layout_light\">\n<div class=\"et_pb_text_inner\">\n<p class=\"p-lead\">Recurring Revenue Rate provides an indication of how much recurring relationship value you are retaining, growing or losing. It\u2019s a crucial metric of how well your Support organization is reaping the benefits of the subscription model. Here\u2019s how to calculate recurring revenue rate.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"et_pb_row_inner et_pb_row_inner_1\">\n<div class=\"et_pb_column et_pb_column_4_4 et_pb_column_inner et_pb_column_inner_1 et-last-child\">\n<div class=\"et_pb_module et_pb_text et_pb_text_1 et_pb_text_align_left et_pb_bg_layout_light\">\n<div class=\"et_pb_text_inner\">\n<h2 class=\"p1\">What is Recurring Revenue Rate?<\/h2>\n<p>Recurring Revenue Rate indicates the percent change in the amount of recurring recurring revenue at the end of a specified period compared with the recurring revenue at the beginning of the same period.<\/p>\n<p>Support and Success leaders can apply recurring revenue rate to a specific timeframe (e.g. quarterly or annually), or to tracking Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR). It\u2019s an essential metric of the financial health of recurring revenue relationships such as service contracts and subscriptions.<\/p>\n<p class=\"p1\">(<em>An important note:<\/em>\u00a0Unlike Contract Renewal Rate, where 100% is the maximum performance level, recurring revenue rate can exceed 100% \u2014\u00a0 indicating that the value of an existing relationship, or the net value of all recurring relationships, has increase from the previous period.)<\/p>\n<h2 class=\"p1\">How to calculate Recurring Revenue Rate<\/h2>\n<p>The formula is a simple ratio:<\/p>\n<p><strong><em>Recurring Revenue Rate =\u00a0<\/em><\/strong><strong><em>Recurring Revenue at End of Term \/ Recurring Revenue at Beginning of Term<\/em><\/strong><\/p>\n<p>Let\u2019s apply it to a very basic example, calculating the recurring revenue rate for Q1:<\/p>\n<div class=\"et_pb_section et_pb_section_1 et_section_regular\">\n<div class=\"et_pb_row et_pb_row_1\">\n<div class=\"et_pb_column_inner et_pb_column_4_4 et_pb_column_3 et_pb_css_mix_blend_mode_passthrough et-last-child\">\n<div class=\"et_pb_module et_pb_text et_pb_text_1 et_pb_text_align_left et_pb_bg_layout_light\">\n<div class=\"et_pb_text_inner\">\n<h4 style=\"padding-left: 40px;\"><em><strong>Recurring Revenue Beginning Q1 = $100<\/strong><\/em><\/h4>\n<p style=\"padding-left: 40px;\"><strong>+<\/strong>\u00a0Recurring Revenue Added in Q1 = $50 ($45\u00a0<em>from new customers +\u00a0<\/em>$5\u00a0<em>from expansion of existing relationships<\/em>)<\/p>\n<p style=\"padding-left: 40px;\"><strong>\u2013<\/strong>\u00a0Recurring Revenue Lost in Q1 = $30 (<em>$25 due to customer churn +\u00a0<\/em><em>$5 due to downgrade of existing relationships)<\/em><\/p>\n<h4 style=\"padding-left: 40px;\"><\/h4>\n<h4 style=\"padding-left: 40px;\"><em><strong>Recurring Revenue End Q1 = $120<\/strong><\/em><\/h4>\n<h3 style=\"padding-left: 40px;\"><\/h3>\n<h2 style=\"padding-left: 40px;\"><strong>Recurring Revenue Rate = 120% (20% growth)<\/strong><\/h2>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The amount of recurring revenue a company receives may increase, stay the same, or decline for a given period. Recurring Revenue Rate indicates the percent change in the amount of &hellip;<\/p>\n","protected":false},"author":4,"featured_media":251631,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":"","_wp_rev_ctl_limit":""},"categories":[27,35,8],"tags":[97,33,40,41,48,86],"class_list":["post-251630","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-insights","category-retain","category-grow","tag-as-a-service","tag-metrics","tag-recurring-revenue","tag-renewal","tag-retention","tag-subscription","post_outcome-grow-revenue","post_outcome-retain-customers","post_activity-customer-success"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.servicexrg.com\/wp-json\/wp\/v2\/posts\/251630","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.servicexrg.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.servicexrg.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.servicexrg.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.servicexrg.com\/wp-json\/wp\/v2\/comments?post=251630"}],"version-history":[{"count":8,"href":"https:\/\/www.servicexrg.com\/wp-json\/wp\/v2\/posts\/251630\/revisions"}],"predecessor-version":[{"id":254914,"href":"https:\/\/www.servicexrg.com\/wp-json\/wp\/v2\/posts\/251630\/revisions\/254914"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.servicexrg.com\/wp-json\/wp\/v2\/media\/251631"}],"wp:attachment":[{"href":"https:\/\/www.servicexrg.com\/wp-json\/wp\/v2\/media?parent=251630"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.servicexrg.com\/wp-json\/wp\/v2\/categories?post=251630"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.servicexrg.com\/wp-json\/wp\/v2\/tags?post=251630"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}