Usage-based revenue scales directly with customer consumption, aligning the vendor's income with the value delivered. It differs from fixed subscription revenue in that it fluctuates month to month based on usage.

Example: A cloud storage company earns usage-based revenue of $0.023 per GB stored per month. A customer storing 10TB pays $230/month, while a customer storing 100TB pays $2,300/month, with revenue growing naturally as customers scale.