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Recurring Revenue

< 1 min read

Definition:

Recurring revenue is the revenue amount generated from ongoing users. This usually includes subscriptions, memberships, contracts, or other payment plans. For mobile apps, recurring revenue is closely associated with users who pay for subscriptions access over multiple billing cycles.


 

What is Recurring Revenue?

Recurring revenue is a type of revenue that repeats. This is different from a one-time purchase or depending on a new sale for every transaction.  One of the most straightforward examples are subscription apps. A user who pays $10 every month can generate revenue repeatedly as long as the subscription remains active. The business does not need to persuade that user to make a completely new purchase each month because the subscription renews according to the billing agreement. It makes recurring revenue different from transactional revenue.

A one-time in-app purchase may generate $20 once. A $10 monthly subscription can generate $20 after two months, $60 after six months, or $120 after a year if the subscriber continues renewing. For mobile teams, recurring revenue develops over time. The first subscription payment is only one part of the subscriber's total value.

How Does Recurring Revenue Work in Mobile Apps?

Recurring revenue in mobile apps usually comes from subscriptions that renew along a defined billing cycle. Common billing cycles include: weekly, monthly, quarterly, or annual plans. A fitness app might charge $14.99 per month. A productivity app might offer an annual plan for $59.99. A mobile game might include a monthly VIP membership alongside in-app purchases and advertising. In each case, the recurring-revenue continues while the subscriber is active and payments flow. The point is that recurring revenue is not created in one go, rather it's accumulative and grows as more subscribers remain active.

What is a Recurring Revenue Model?

Recurring revenue is a subscription business model designed around repeat payments from ongoing customer relationships. For mobile apps, recurring revenue models can include:

  • Paid monthly subscriptions
  • Annual subscriptions
  • Premium memberships
  • Content subscriptions
  • Subscription-based feature access
  • VIP passes
  • Recurring service plans

Some apps use recurring revenue as a main monetization model. Other apps, like those using hybrid monetization models, combine it with advertising or in-app purchases as part of a hybrid monetization strategy. For example, a language-learning app may offer:

  • A free ad-supported tier
  • A monthly premium subscription
  • One-time specialist learning packs

The subscription creates recurring revenue, while the other monetization methods create additional revenue streams. Recurring revenue models do not necessarily require the entire business to rely on subscriptions alone.

Recurring Revenue Example

Suppose a meditation app acquires subscribers through two networks.

Network A

  • 300 new subscribers
  • $9,000 in new subscription revenue
  • $6,000 in renewal revenue after six months
  • Total subscription revenue: $15,000

Network B

  • 220 new subscribers
  • $6,600 in new subscription revenue
  • $14,000 in renewal revenue after six months
  • Total subscription revenue: $20,600

Network A generates more new subscribers. Network B generates more recurring value. 

Recurring Revenue vs. Subscription Revenue

Recurring revenue and subscription revenue are closely related, but they are not always identical. Subscription revenue is revenue generated specifically from subscription transactions. Recurring revenue is a broader business concept describing revenue expected to repeat over time. For many mobile subscription apps, most recurring revenue comes from subscriptions, so the two concepts can overlap significantly. For example, MMP data may report:

  • $5,000 in new subscription revenue
  • $8,000 in renewal revenue
  • $13,000 in all subscriptions revenue

Recurring revenue may also be represented through normalized business metrics such as MRR or ARR. When comparing campaign performance, transaction revenue and normalized recurring-revenue metrics answer different questions.

Recurring Revenue vs. Monthly Recurring Revenue

Recurring revenue is the broad concept, but it can also be broken down. Monthly recurring revenue, or MRR, expresses active recurring subscription value on a normalized monthly basis.

Suppose an app has 100 monthly subscribers paying $10 and 50 annual subscribers paying $120. The monthly subscribers contribute $1,000 in normalized monthly value, whereas annual subscribers contribute another $500 because each $120 annual plan represents $10 per month. Total MRR is $1,500.

The monthly payments collected could be different since annual subscribers pay the full amount upfront. That is why MRR should not be treated as the same thing as the recurring subscription transactions collected in a particular month.

Recurring Revenue vs. Annual Recurring Revenue

It is similar to annual recurring revenue, or ARR, which expresses recurring value on an annual basis. A common calculation is:

ARR = MRR × 12

 

If an app has $50,000 in MRR, its annualized recurring run rate is $600,000 ARR. This number is useful for understanding the scale of a recurring-revenue business, while MRR provides a more responsive monthly view.

For mobile acquisition teams, neither metric replaces campaign-level subscription revenue attribution. To determine whether Campaign A generated more revenue than Campaign B, actual subscription events, revenue, spend, and subscriber LTV are usually more actionable than the company's overall ARR.

Why is Recurring Revenue Important?

Recurring revenue makes revenue more predictable because existing subscribers can continue generating value without a new acquisition event every billing period. It does not mean recurring revenue is guaranteed. Subscribers always have the freedom to cancel, fail to renew, request refunds, downgrade, expire, or have payment issues. A healthy business therefore depends on more than just acquiring new subscribers. It also depends on retaining existing subscribers.

Consider an app that generates $20,000 in new recurring value during a month but loses $15,000 through cancellations and downgrades. Looking only at new subscriptions makes growth appear strong. Looking at the recurring revenue base reveals that much of that growth is replacing lost value. It shows how acquisition, retention, and revenue measurement are connected.

How Can an MMP Help Measure Recurring Revenue?

A mobile measurement partner or MMP, connects acquisition data with post-install events and revenue. It helps subscription apps analyze which acquisition sources generate subscribers who continue paying.Tenjin's iOS Subscription Revenue Reporting, currently in open beta, includes subscription lifecycle and revenue metrics such as:

  • New Trials
  • New Subscriptions
  • New Subscription Revenue
  • Renewals
  • Renewal Revenue
  • Cancellations
  • All Subscriptions Revenue

These metrics can be analyzed alongside acquisition dimensions such as campaign, ad network, country, and Product ID.

RevenueCat and Adapty integrations can also bring subscription events into Tenjin so teams using those platforms can connect subscriber activity with acquisition reporting. The value of this measurement is not simply seeing recurring revenue, but understanding where that revenue came from, and taking action. 

How Do Churn and Renewal Affect Recurring Revenue?

Renewal is when a user extends their plan and it becomes recurring revenue. Churn is the opposite: when a user leaves and ultimate reduces revenue. A subscriber who renews repeatedly creates more opportunities for revenue and higher realized LTV. A subscriber who cancels after the first month creates much less long-term value.

Consider two subscribers paying $10 per month where Subscriber A pays for two months $20 total and Subscriber B pays for twelve months at $120 total. Even though they started a similar first payment, renewal behavior creates the difference. This is why renewal rate, renewal revenue, cancellation, and revenue churn belong next to recurring revenue in subscription analysis.

Recurring Revenue and Cohort Maturity

Recurring revenue takes more time to accumulate. A cohort acquired 30 days ago has not had the same opportunity to generate renewals as a cohort acquired 180 days ago, so comparing their total revenue directly is misleading. A more fair approach would compare cohorts at equivalent maturity points like Day 30 subscription revenue, Day 90 subscription revenu, or Day 180 subscriber LTV. Comparing like for like distinguishes genuine campaign quality from simple differences in active subscriber groups. 

Best Practices for Measuring Recurring Revenue

Separate new and renewal revenue.
This shows whether growth comes from acquisition or subscriber retention.

Connect revenue to acquisition cost.
Revenue alone does not show whether a campaign is profitable.

Track cancellations and churn.
Recurring revenue can decline even while new subscriptions grow.

Compare cohorts at the same maturity.
Older cohorts have had more opportunities to renew.

Use MRR and ARR for the right purpose.
They are useful recurring-revenue metrics, but they are not substitutes for attributed transaction revenue.

Measure subscriber LTV.
Long-term value is often more informative than first-payment revenue for subscription UA.

Related Terms

Frequently Asked Questions

What is recurring revenue?

Recurring revenue is revenue expected to repeat through an ongoing customer relationship, commonly through subscriptions, memberships, or contracts.

What is an example of recurring revenue?

A mobile app charging users $10 every month for premium access generates recurring revenue while those subscriptions remain active.

Is recurring revenue the same as subscription revenue?

Not exactly. Subscription revenue is revenue from subscription transactions. Recurring revenue is a broader concept describing repeatable revenue over time.

What is the difference between recurring revenue and MRR?

Recurring revenue is the broad category. MRR normalizes active recurring subscription value into a monthly amount.

Why is recurring revenue important for mobile marketers?

It helps marketers understand that subscriber value can continue long after the first payment, making renewals, LTV, churn, and acquisition-source measurement important for campaign optimization.