Recurring Revenue
Recurring revenue is income that a contract, or the way the business is built, makes likely to come back each period.
Think of maintenance contracts, framework agreements with a minimum draw, software subscriptions, licence fees, and long-term equipment leases. A contract or a structural tie is what qualifies the revenue. A loyal customer who simply comes back does not. Recurring revenue is one of three quality levers. It usually survives a change of control better than project work, or sales that live in the owner's personal relationships. The lever here is linear: minus 5 percent on the multiple at none, plus 20 percent when all of the revenue recurs.
Example
Total revenue of 8.0 million euros, of which maintenance contracts 2.0 million and software subscriptions 0.4 million. Recurring-revenue share = (2.0 + 0.4) / 8.0 = 30 percent.