What are bookings?
Bookings is the total contract value a company signs with customers in a period — recurring and one-time, regardless of when the revenue is recognised. In SaaS it is the forward-looking commercial commitment, sitting upstream of both recurring revenue and GAAP revenue.
Bookings vs. revenue vs. ARR
- Bookings: what was sold in the period — total contract value (TCV).
- Recurring revenue / ARR: the recurring portion of bookings annualised at a point in time.
- GAAP revenue: what’s recognised in the income statement under IFRS 15 / ASC 606 as performance obligations are satisfied.
Example: a customer signs a $300k three-year SaaS contract with $30k one-time implementation in January. Bookings in Q1 = $330k. ARR added in Q1 = $100k ($300k ÷ 3). GAAP revenue in Q1 = ~$25k (one quarter of the year-one subscription) plus implementation recognised over the contract life.
Sub-types worth tracking
- New bookings: from new customers.
- Expansion bookings: upgrades, seat adds, cross-sell within existing accounts.
- Renewal bookings: renewed contracts of expiring subscriptions.
- Annual Contract Value (ACV): bookings divided by contract years — a normalisation for multi-year deals.
- Total Contract Value (TCV): the full contract value, including non-recurring items.
Why founders track it
Bookings is the leading indicator of future ARR and GAAP revenue. A bookings slowdown shows up in revenue 6–12 months later. Sales-team variable comp is usually tied to bookings, not revenue, because compensation needs to be aligned with what reps can close in the period.
Do: publish bookings, ARR and GAAP revenue side-by-side every month; reconcile bookings to ARR additions.
Don’t: report bookings as revenue in a pitch deck — confusing the two is the fastest way to lose investor trust in DD.