
How Recurring Revenue Impacts Business Valuation
Recurring revenue dramatically boosts business valuation because it creates predictable cash flow, lowers risk for buyers, and supports stronger forward-looking earnings models. Companies with recurring income—like subscriptions or long-term contracts—often command 2–3x higher multiples than businesses relying on one-time sales. The stability, retention, and scalability baked into recurring revenue make these companies far more attractive during acquisition and due diligence.





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