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A 120,000 booking against 75,000 of revenue
New bookings are 120,000. Billings are 90,000. Recognized revenue is 75,000. Deferred revenue acquired in a combination is 0. These four amounts are an example so the subtraction is easy to follow. Publication 538 does not publish a bookings target, and neither does the Fortinet exhibit quoted in the assumptions.
New bookings: 25% lower
Change new bookings to 90,000 while keeping the other example values the same.
New bookings: 25% higher
Change new bookings to 150,000 while keeping the other example values the same.
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Quick answer
What does the Bookings versus billings calculate?
How far do new bookings sit from billings and from recognized revenue? This calculator uses new bookings, billings, revenue recognized, and deferred revenue acquired to estimate signed value, invoices, and revenue you recognized immediately in your browser.
With the values currently entered, the result is $45,000.00 — new bookings above recognized revenue. It also shows bookings minus billings, change in deferred revenue, and billings.
How to use the Bookings versus billings
- Replace the example values with your own numbers.
- Review the result and supporting figures as they update automatically.
- Check the formula and assumptions before using the estimate for a decision.
Inputs used
- New bookings
- Billings
- Revenue recognized
- Deferred revenue acquired
Bookings versus billings formula
Bookings gap = new bookings − recognized revenue. Billings gap = new bookings − billings. Change in deferred revenue = billings − recognized revenue + deferred revenue acquired.
Assumptions
- IRS Publication 538 says that under an accrual method you generally report income in the year you earn it, whether or not you have been paid. The revenue box is that earned amount. The bookings box is the contract value you count as signed in the period. In a March 14, 2024 letter to the SEC, Fair Isaac defined ACV bookings as the average annualized value of software contracts signed in the period, and said that figure is not a substitute for GAAP revenue. Their definition keeps contracts of at least 24 months, drops perpetual licenses, and counts a renewal only as the incremental annual amount. Type the bookings your own definition produces.
- Fortinet's exhibit to the Form 8-K filed for the quarter ended September 30, 2024 defines billings as GAAP revenue plus the change in deferred revenue, minus deferred revenue acquired in a business combination. Rearranged, the change in deferred revenue is billings minus revenue plus that acquired balance. In that quarter, revenue was $1,508.1 million, the change was $115.5 million, acquired deferred revenue was $41.4 million, and billings were $1,582.2 million. The acquired box starts at 0. Cancellations, refunds, and currency moves are not separate boxes.
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Authoritative sources
These sources explain the definitions, factors, or rules behind this tool. Their geographic scope is shown because an official source for one country is not automatically valid somewhere else.
Under an accrual method, you generally report income in the year you earn it, whether or not payment has arrived. The purpose is to match income and expenses in the correct year.
Q3 2024 earnings exhibit, billings definitionFortinet, Inc. — exhibit to the Form 8-K filed with the US Securities and Exchange CommissionScope: One public company's non-GAAP billings definition for the quarter ended September 30, 2024Defines billings as GAAP revenue plus the change in deferred revenue, minus deferred revenue acquired in a business combination. That quarter: revenue $1,508.1 million, change in deferred revenue $115.5 million, acquired deferred revenue $41.4 million, billings $1,582.2 million.
Response on ACV bookingsFair Isaac Corporation — letter to the US Securities and Exchange Commission, March 14, 2024Scope: One public company's definition of ACV bookings, which it says is not GAAP revenueDefines ACV bookings as the average annualized value of software contracts signed in the period. The letter says the figure is not a substitute for GAAP revenue. It keeps contracts of at least 24 months, excludes perpetual licenses, and counts a renewal only as the incremental annual amount.
Sources do not endorse Calculum. Check the source date, scope, and your own documents before making a financial, tax, insurance, or reporting decision.
Practical guide
Bookings versus billings example and edge cases
Bookings, billings, and recognized revenue are three totals for the same customers. Bookings are the contract value you count as signed. Billings are what you invoiced. Revenue is what you earned. IRS Publication 538 says an accrual method reports income in the year you earn it, not when the cash arrives.
Example: A 120,000 booking against 75,000 of revenue
New bookings are 120,000. Billings are 90,000. Recognized revenue is 75,000. Deferred revenue acquired in a combination is 0. These four amounts are an example so the subtraction is easy to follow. Publication 538 does not publish a bookings target, and neither does the Fortinet exhibit quoted in the assumptions.
- New bookings
- 120,000
- Billings
- 90,000
- Revenue recognized
- 75,000
- Deferred revenue acquired
- 0
Calculated result$45,000.00new bookings above recognized revenue
New bookings sit 45,000 above the 75,000 of recognized revenue. Billings sit 30,000 under the bookings. With nothing acquired, deferred revenue rises by 15,000, which is 90,000 minus 75,000.
Example results use the default display profile. The calculator above follows your selected country and units.
How to read the result
- Read the 45,000 first. It is 120,000 minus 75,000. The 30,000 is 120,000 minus 90,000. The 15,000 is the Fortinet rearrangement with the acquired box at 0.
- FICO told the SEC on March 14, 2024 that its ACV bookings are not a substitute for GAAP revenue. Their definition annualizes contracts of at least 24 months and counts a renewal only as the incremental piece. If your 120,000 uses a different filter, the 45,000 describes that filter.
Edge cases worth checking
Older contracts supply this period's revenue
Revenue can be larger than new bookings when you are earning contracts signed earlier. Swap in bookings of 50,000, billings of 80,000, and revenue of 90,000. Recognized revenue then sits 40,000 above new bookings, and deferred revenue falls by 10,000.
Acquired deferred revenue is left at zero
Fortinet's quarter ended September 30, 2024 reported revenue of 1,508.1 million, billings of 1,582.2 million, and acquired deferred revenue of 41.4 million. The change in deferred revenue is 115.5 million. Leave the 41.4 million at 0 and the same billings and revenue imply a change of 74.1 million.
What changes the result most
New bookings
Use a current amount for new bookings. Include fees or recurring costs that belong in the same figure.
Billings
Use a current amount for billings. Include fees or recurring costs that belong in the same figure.
Revenue recognized
Use a current amount for revenue recognized. Include fees or recurring costs that belong in the same figure.
Try a different scenario
Small changes show whether the answer is stable or sensitive.
New bookings: 25% lower
90,000$15,000.00new bookings above recognized revenue
New bookings: 25% higher
150,000$75,000.00new bookings above recognized revenue
Billings: 25% higher
112,500$45,000.00new bookings above recognized revenue
Common mistakes
Check new bookings
IRS Publication 538 says that under an accrual method you generally report income in the year you earn it, whether or not you have been paid. The revenue box is that earned amount. The bookings box is the contract value you count as signed in the period. In a March 14, 2024 letter to the SEC, Fair Isaac defined ACV bookings as the average annualized value of software contracts signed in the period, and said that figure is not a substitute for GAAP revenue. Their definition keeps contracts of at least 24 months, drops perpetual licenses, and counts a renewal only as the incremental annual amount. Type the bookings your own definition produces. Make sure this matches the number you enter.
Keep deferred revenue acquired consistent
Fortinet's exhibit to the Form 8-K filed for the quarter ended September 30, 2024 defines billings as GAAP revenue plus the change in deferred revenue, minus deferred revenue acquired in a business combination. Rearranged, the change in deferred revenue is billings minus revenue plus that acquired balance. In that quarter, revenue was $1,508.1 million, the change was $115.5 million, acquired deferred revenue was $41.4 million, and billings were $1,582.2 million. The acquired box starts at 0. Cancellations, refunds, and currency moves are not separate boxes. Use the same units and time period throughout the calculation.
Do not rely on one bookings versus billings scenario
Run a cautious case and an optimistic case. The range is often more useful than one exact-looking number.
Use this result well
How far do new bookings sit from billings and from recognized revenue?
It does not replace a quote, contract, accountant, or local employment guidance.