Investors more highly value companies where the majority of total revenue comes from product revenue (vs. from services). Why? Services revenue is non-recurring, has much lower margins, and is less scalable. Product revenue is the what you generate from the sale of the software or product itself.
Total revenue is the sum of:
- Once off revenue (services or product)
- Recurring revenue e.g. monthly/annual subscriptions
So recurring revenue is a component of total revenue.