A recurring revenue model is a business model where a company generates predictable, ongoing revenue from customers at regular intervals, typically through subscriptions, contracts, or usage-based billing.

Instead of one-time transactions, customers pay continuously for access to a product, service, or outcome. This can include monthly or annual SaaS subscriptions, service retainers, maintenance agreements, or recurring usage fees tied to consumption.

In B2B, recurring revenue models are designed around long-term value delivery. Pricing is often structured through tiers, usage metrics, seat-based models, or hybrid approaches that scale with customer growth. Contracts, renewals, and expansion revenue (upsell, cross-sell) are core components of the model.

The key advantage is predictability. Recurring revenue improves forecasting, stabilizes cash flow, and increases customer lifetime value. It also shifts focus toward retention, customer success, and continuous value delivery rather than one-time sales.

However, it requires strong pricing strategy, packaging, and governance. Poorly designed recurring models can lead to underpricing, misaligned value metrics, or churn if customers do not perceive ongoing value.