Gross Bookings
Financials
Industry:
Sector Agnostic
Short Definition
Gross Bookings (aka TCV bookings) is the total signed contract/order value in a period, before later adjustments or cancellations. For each deal, it includes recurring value over the full committed term (MRR × 12 × years) plus committed one-time fees. It measures raw sales demand at signature, not delivery.
Short Definition
Gross Bookings (aka TCV bookings) is the total signed contract/order value in a period, before later adjustments or cancellations. For each deal, it includes recurring value over the full committed term (MRR × 12 × years) plus committed one-time fees. It measures raw sales demand at signature, not delivery.
Short Definition
Gross Bookings (aka TCV bookings) is the total signed contract/order value in a period, before later adjustments or cancellations. For each deal, it includes recurring value over the full committed term (MRR × 12 × years) plus committed one-time fees. It measures raw sales demand at signature, not delivery.
Why it matters for Investors
Demand snapshot: Shows fresh customer commitments and sales traction.
Forward indicator: Feeds future revenue/cash forecasts.
Efficiency lens: Compared with sales spend, it hints at acquisition efficiency.
Why it matters for Investors
Demand snapshot: Shows fresh customer commitments and sales traction.
Forward indicator: Feeds future revenue/cash forecasts.
Efficiency lens: Compared with sales spend, it hints at acquisition efficiency.
Why it matters for Investors
Demand snapshot: Shows fresh customer commitments and sales traction.
Forward indicator: Feeds future revenue/cash forecasts.
Efficiency lens: Compared with sales spend, it hints at acquisition efficiency.
Formula
Standard contracts (fixed-term): Committed value = (Annualized Recurring Revenue × Term in Years) + One-Time Fees.
E.g., $1K MRR × 12 × 3 years + $5K setup = $41K.
Month-to-month/evergreen contracts: No fixed term → Committed value = First Committed Period (e.g., MRR × 12 for one year or single month’s MRR) + One-Time Fees; report ARR/MRR separately. An evergreen contract is a type of agreement that automatically renews at the end of its initial term (often monthly or annually) and continues indefinitely until one party provides notice to terminate it.
E.g., $1K MRR (no term) + $2K setup = $14K (assuming one-year commitment) or $3K (one-month).
Transaction models (e-com/marketplaces): Committed value = Total Order Value (akin to GMV) in the period, not multi-year TCV.
E.g., $50K in placed orders = $50K.
Practical considerations:
Include: Signed New Logo, Expansion, and Renewal deals.
Exclude: Cancellations/down-sells (show them separately to get Net Bookings), taxes, pass-throughs, and uncommitted usage/overage.
Multi-year & ramps: Book the committed total at signature; store Year-1 ARR separately for ARR reporting.
Timing: Signature/order date drives bookings; revenue/ARR start later (until then they sit in CARR).
Formula
Standard contracts (fixed-term): Committed value = (Annualized Recurring Revenue × Term in Years) + One-Time Fees.
E.g., $1K MRR × 12 × 3 years + $5K setup = $41K.
Month-to-month/evergreen contracts: No fixed term → Committed value = First Committed Period (e.g., MRR × 12 for one year or single month’s MRR) + One-Time Fees; report ARR/MRR separately. An evergreen contract is a type of agreement that automatically renews at the end of its initial term (often monthly or annually) and continues indefinitely until one party provides notice to terminate it.
E.g., $1K MRR (no term) + $2K setup = $14K (assuming one-year commitment) or $3K (one-month).
Transaction models (e-com/marketplaces): Committed value = Total Order Value (akin to GMV) in the period, not multi-year TCV.
E.g., $50K in placed orders = $50K.
Practical considerations:
Include: Signed New Logo, Expansion, and Renewal deals.
Exclude: Cancellations/down-sells (show them separately to get Net Bookings), taxes, pass-throughs, and uncommitted usage/overage.
Multi-year & ramps: Book the committed total at signature; store Year-1 ARR separately for ARR reporting.
Timing: Signature/order date drives bookings; revenue/ARR start later (until then they sit in CARR).
Formula
Standard contracts (fixed-term): Committed value = (Annualized Recurring Revenue × Term in Years) + One-Time Fees.
E.g., $1K MRR × 12 × 3 years + $5K setup = $41K.
Month-to-month/evergreen contracts: No fixed term → Committed value = First Committed Period (e.g., MRR × 12 for one year or single month’s MRR) + One-Time Fees; report ARR/MRR separately. An evergreen contract is a type of agreement that automatically renews at the end of its initial term (often monthly or annually) and continues indefinitely until one party provides notice to terminate it.
E.g., $1K MRR (no term) + $2K setup = $14K (assuming one-year commitment) or $3K (one-month).
Transaction models (e-com/marketplaces): Committed value = Total Order Value (akin to GMV) in the period, not multi-year TCV.
E.g., $50K in placed orders = $50K.
Practical considerations:
Include: Signed New Logo, Expansion, and Renewal deals.
Exclude: Cancellations/down-sells (show them separately to get Net Bookings), taxes, pass-throughs, and uncommitted usage/overage.
Multi-year & ramps: Book the committed total at signature; store Year-1 ARR separately for ARR reporting.
Timing: Signature/order date drives bookings; revenue/ARR start later (until then they sit in CARR).
Worked Example
Period: March
Deal | Type | Recurring (Year-1) | Term | One-time | TCV booked ($) | Notes |
|---|---|---|---|---|---|---|
A | New Logo | $24,000 | 2 years | $2,000 | $50,000 | $24k × 2 + $2k |
B | Expansion | $18,000 | 1 year | $0 | $18,000 | Upsell on existing |
C | Renewal (downsized) | $60,000 | 1 year | $0 | $60,000 | Prior was $80k |
D | Renewal (flat) | $100,000 | 1 year | $0 | $100,000 | Same terms |
E | New Logo | $24,000 | 3 years | $0 | $72,000 | $24k × 3 |
Gross Bookings (March): $300,000 = $50,000 + $18,000 + $60,000 + $100,000 + $72,000
Cancellations/Down-sells signed this period (not in Gross):
Churn signed for May: −$30,000
Down-sell portion of C (80k → 60k): −$20,000
Net Bookings (March): $300,000 − $50,000 = $250,000
Year-1 ARR from these bookings: $24,000 + $18,000 + $60,000 + $100,000 + $24,000 = $226,000
(flows into ARR when each contract starts; until then = CARR)
Notes:
Gross = positives only. Show cancels/down-sells separately; use them to compute Net Bookings.
Use contracted net price. After discounts; exclude taxes/pass-through/variable overage.
Keep two views. Track TCV for bookings and Year-1 ARR for ARR metrics.
Worked Example
Period: March
Deal | Type | Recurring (Year-1) | Term | One-time | TCV booked ($) | Notes |
|---|---|---|---|---|---|---|
A | New Logo | $24,000 | 2 years | $2,000 | $50,000 | $24k × 2 + $2k |
B | Expansion | $18,000 | 1 year | $0 | $18,000 | Upsell on existing |
C | Renewal (downsized) | $60,000 | 1 year | $0 | $60,000 | Prior was $80k |
D | Renewal (flat) | $100,000 | 1 year | $0 | $100,000 | Same terms |
E | New Logo | $24,000 | 3 years | $0 | $72,000 | $24k × 3 |
Gross Bookings (March): $300,000 = $50,000 + $18,000 + $60,000 + $100,000 + $72,000
Cancellations/Down-sells signed this period (not in Gross):
Churn signed for May: −$30,000
Down-sell portion of C (80k → 60k): −$20,000
Net Bookings (March): $300,000 − $50,000 = $250,000
Year-1 ARR from these bookings: $24,000 + $18,000 + $60,000 + $100,000 + $24,000 = $226,000
(flows into ARR when each contract starts; until then = CARR)
Notes:
Gross = positives only. Show cancels/down-sells separately; use them to compute Net Bookings.
Use contracted net price. After discounts; exclude taxes/pass-through/variable overage.
Keep two views. Track TCV for bookings and Year-1 ARR for ARR metrics.
Worked Example
Period: March
Deal | Type | Recurring (Year-1) | Term | One-time | TCV booked ($) | Notes |
|---|---|---|---|---|---|---|
A | New Logo | $24,000 | 2 years | $2,000 | $50,000 | $24k × 2 + $2k |
B | Expansion | $18,000 | 1 year | $0 | $18,000 | Upsell on existing |
C | Renewal (downsized) | $60,000 | 1 year | $0 | $60,000 | Prior was $80k |
D | Renewal (flat) | $100,000 | 1 year | $0 | $100,000 | Same terms |
E | New Logo | $24,000 | 3 years | $0 | $72,000 | $24k × 3 |
Gross Bookings (March): $300,000 = $50,000 + $18,000 + $60,000 + $100,000 + $72,000
Cancellations/Down-sells signed this period (not in Gross):
Churn signed for May: −$30,000
Down-sell portion of C (80k → 60k): −$20,000
Net Bookings (March): $300,000 − $50,000 = $250,000
Year-1 ARR from these bookings: $24,000 + $18,000 + $60,000 + $100,000 + $24,000 = $226,000
(flows into ARR when each contract starts; until then = CARR)
Notes:
Gross = positives only. Show cancels/down-sells separately; use them to compute Net Bookings.
Use contracted net price. After discounts; exclude taxes/pass-through/variable overage.
Keep two views. Track TCV for bookings and Year-1 ARR for ARR metrics.
Best Practices
Separate buckets: Report New vs. Expansion vs. Renewal; also show Net Bookings = Gross − cancellations/down-sells.
Segment deeply: Break out by customer size, channel, product, region to see what’s working.
Automate reconciliation: Sync CRM ↔ CPQ/billing; run a monthly tie-out and flag mismatches. CRM = your deals tracker (e.g., Salesforce). Where you mark a deal Closed–Won. CPQ = Configure-Price-Quote. The tool that builds the exact products, term, and price for the contract. Billing = subscription/invoicing system (e.g., Chargebee/Zuora). Where the contract is activated and invoiced.
Forecast bridge: Convert bookings to Year-1 ARR, billings, and revenue using start dates, ramps, and milestones.
Be consistent: Publish a 1-pager on what’s included (one-times, ramps, FX rate at signature, renewals) and stick to it.
Balance views: Use Gross for sales momentum; share Net for investor realism.
Industry tips:
SaaS: Store TCV (includes committed one-times) and Year-1 ARR; include only committed ramps/minimums—exclude pure overage.
Marketplaces / E-commerce: Treat gross bookings like GMV; track returns/cancels to show Net; exclude tax/shipping pass-throughs if not economic.
Services / Hardware: Include committed project/volume; tie to delivery milestones; track change orders separately.
Usage-based models: Count committed minimums; show an uncommitted variable line outside bookings.
Best Practices
Separate buckets: Report New vs. Expansion vs. Renewal; also show Net Bookings = Gross − cancellations/down-sells.
Segment deeply: Break out by customer size, channel, product, region to see what’s working.
Automate reconciliation: Sync CRM ↔ CPQ/billing; run a monthly tie-out and flag mismatches. CRM = your deals tracker (e.g., Salesforce). Where you mark a deal Closed–Won. CPQ = Configure-Price-Quote. The tool that builds the exact products, term, and price for the contract. Billing = subscription/invoicing system (e.g., Chargebee/Zuora). Where the contract is activated and invoiced.
Forecast bridge: Convert bookings to Year-1 ARR, billings, and revenue using start dates, ramps, and milestones.
Be consistent: Publish a 1-pager on what’s included (one-times, ramps, FX rate at signature, renewals) and stick to it.
Balance views: Use Gross for sales momentum; share Net for investor realism.
Industry tips:
SaaS: Store TCV (includes committed one-times) and Year-1 ARR; include only committed ramps/minimums—exclude pure overage.
Marketplaces / E-commerce: Treat gross bookings like GMV; track returns/cancels to show Net; exclude tax/shipping pass-throughs if not economic.
Services / Hardware: Include committed project/volume; tie to delivery milestones; track change orders separately.
Usage-based models: Count committed minimums; show an uncommitted variable line outside bookings.
Best Practices
Separate buckets: Report New vs. Expansion vs. Renewal; also show Net Bookings = Gross − cancellations/down-sells.
Segment deeply: Break out by customer size, channel, product, region to see what’s working.
Automate reconciliation: Sync CRM ↔ CPQ/billing; run a monthly tie-out and flag mismatches. CRM = your deals tracker (e.g., Salesforce). Where you mark a deal Closed–Won. CPQ = Configure-Price-Quote. The tool that builds the exact products, term, and price for the contract. Billing = subscription/invoicing system (e.g., Chargebee/Zuora). Where the contract is activated and invoiced.
Forecast bridge: Convert bookings to Year-1 ARR, billings, and revenue using start dates, ramps, and milestones.
Be consistent: Publish a 1-pager on what’s included (one-times, ramps, FX rate at signature, renewals) and stick to it.
Balance views: Use Gross for sales momentum; share Net for investor realism.
Industry tips:
SaaS: Store TCV (includes committed one-times) and Year-1 ARR; include only committed ramps/minimums—exclude pure overage.
Marketplaces / E-commerce: Treat gross bookings like GMV; track returns/cancels to show Net; exclude tax/shipping pass-throughs if not economic.
Services / Hardware: Include committed project/volume; tie to delivery milestones; track change orders separately.
Usage-based models: Count committed minimums; show an uncommitted variable line outside bookings.
FAQs
What exactly counts in Gross Bookings?
All signed customer commitments in the period: recurring value for the committed term plus any committed one-time fees.When do we record it?
On the signature/order date. Go-live/fulfilment affects revenue, not bookings.Are one-time fees included?
Yes—committed one-time items (e.g., setup, implementation) are included in Gross Bookings.Do ramps and usage count?
Include pre-committed ramp steps. Exclude uncommitted pay-as-you-go overage.Gross Bookings vs Revenue?
Bookings = signed commitment now. Revenue = earned later as you deliver.Gross Bookings vs Billings (invoices)?
Billings = cash invoiced this period. Bookings = total contract value signed this period.Gross Bookings vs CARR/ARR?
CARR/ARR = annualized recurring run-rate (no one-times). Gross Bookings can include one-times and multi-year totals.Gross Bookings/ACV/TCV—how do they relate?
ACV = average annual value of a deal. TCV = total contract value (often ACV × years + one-times). Gross Bookings often sums TCV for deals signed in the period.What about post-sign cancellations/down-sells?
They stay in Gross Bookings history; show their impact in Net Bookings (Gross − cancellations/down-sells).
FAQs
What exactly counts in Gross Bookings?
All signed customer commitments in the period: recurring value for the committed term plus any committed one-time fees.When do we record it?
On the signature/order date. Go-live/fulfilment affects revenue, not bookings.Are one-time fees included?
Yes—committed one-time items (e.g., setup, implementation) are included in Gross Bookings.Do ramps and usage count?
Include pre-committed ramp steps. Exclude uncommitted pay-as-you-go overage.Gross Bookings vs Revenue?
Bookings = signed commitment now. Revenue = earned later as you deliver.Gross Bookings vs Billings (invoices)?
Billings = cash invoiced this period. Bookings = total contract value signed this period.Gross Bookings vs CARR/ARR?
CARR/ARR = annualized recurring run-rate (no one-times). Gross Bookings can include one-times and multi-year totals.Gross Bookings/ACV/TCV—how do they relate?
ACV = average annual value of a deal. TCV = total contract value (often ACV × years + one-times). Gross Bookings often sums TCV for deals signed in the period.What about post-sign cancellations/down-sells?
They stay in Gross Bookings history; show their impact in Net Bookings (Gross − cancellations/down-sells).
FAQs
What exactly counts in Gross Bookings?
All signed customer commitments in the period: recurring value for the committed term plus any committed one-time fees.When do we record it?
On the signature/order date. Go-live/fulfilment affects revenue, not bookings.Are one-time fees included?
Yes—committed one-time items (e.g., setup, implementation) are included in Gross Bookings.Do ramps and usage count?
Include pre-committed ramp steps. Exclude uncommitted pay-as-you-go overage.Gross Bookings vs Revenue?
Bookings = signed commitment now. Revenue = earned later as you deliver.Gross Bookings vs Billings (invoices)?
Billings = cash invoiced this period. Bookings = total contract value signed this period.Gross Bookings vs CARR/ARR?
CARR/ARR = annualized recurring run-rate (no one-times). Gross Bookings can include one-times and multi-year totals.Gross Bookings/ACV/TCV—how do they relate?
ACV = average annual value of a deal. TCV = total contract value (often ACV × years + one-times). Gross Bookings often sums TCV for deals signed in the period.What about post-sign cancellations/down-sells?
They stay in Gross Bookings history; show their impact in Net Bookings (Gross − cancellations/down-sells).
Related Metrics
Commonly mistaken for:
Revenue (Earned after delivery; bookings are at sign)
Billings (Invoiced cash this period, not total signed value)
CARR/ARR (Annualized recurring run-rate; excludes one-times and multi-year totals)
Net Bookings (Gross Bookings minus cancellations/down-sells)
Related Metrics
Commonly mistaken for:
Revenue (Earned after delivery; bookings are at sign)
Billings (Invoiced cash this period, not total signed value)
CARR/ARR (Annualized recurring run-rate; excludes one-times and multi-year totals)
Net Bookings (Gross Bookings minus cancellations/down-sells)
Related Metrics
Commonly mistaken for:
Revenue (Earned after delivery; bookings are at sign)
Billings (Invoiced cash this period, not total signed value)
CARR/ARR (Annualized recurring run-rate; excludes one-times and multi-year totals)
Net Bookings (Gross Bookings minus cancellations/down-sells)
Source of:
Components:
Index