Bookings vs Billings vs Revenue

Bookings are the total value of contracts signed in a period; billings are what was actually invoiced; revenue is what accounting rules let you recognise as earned. A single deal can produce three very different numbers in the same quarter.

Formula

Bookings = contracts signed. Billings = amounts invoiced (≈ revenue + change in deferred revenue). Revenue = value recognised as the service is delivered.

Worked example

Sign a $360k, 3-year deal in March, invoice the first year ($120k) up front: Q1 shows $360k bookings, $120k billings, and roughly $10k revenue (one month of the $120k year recognised).

Each answers a different question. Bookings measure sales momentum; billings measure cash collection (and drive deferred revenue); revenue measures delivery. Boards that track only one get blindsided — bookings can boom while cash collection stalls.

The classic abuse is quoting multi-year bookings as if they were ARR. A $360k three-year booking is $120k of ARR, not $360k.

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