Formula
TCV bookings = Σ TCV of contracts signed in the period ACV bookings = Σ ACV of contracts signed in the period ARR bookings = Σ ARR added by contracts signed in the period
Worked example
Illustrative figures. Three contracts signed in one quarter give three different bookings figures.
| Contract | TCV | ACV | ARR added |
|---|---|---|---|
| New customer, three-year ramp | 325,000 | 100,000 | 80,000 |
| Expansion, one year | 30,000 | 30,000 | 30,000 |
| Renewal at the same price | 60,000 | 60,000 | – |
| Total | 415,000 | 190,000 | 110,000 |
Bookings, ARR and revenue
Bookings are recorded at signature, ARR when the service period starts, and revenue as performance obligations are satisfied. For the same contract, the three can fall in different quarters.
Renewals
Including renewals inflates bookings for a company with a large installed base. Report new and expansion bookings separately from renewal bookings.
Disclosure
Bookings are not defined by accounting standards. Define the measure in the pack, including the treatment of multi-year contracts, one-time fees and cancellations.
Where Revnewed fits
Revnewed does not record signature dates or report bookings. It measures recurring revenue from the date a contract goes live.
Contracts carry a deal type (new, expansion, renewal, reactivation or downgrade) and a total contract value, which export to CSV for reconciliation with bookings in a CRM.
Common misstatements
- Bookings presented as ARR
- A contract signed this quarter that starts next quarter adds no ARR this quarter.
- Renewals mixed with new business
- The installed base then drives the figure, not sales.
- Multi-year TCV against annual figures
- Compare like with like: ACV against ACV, TCV against TCV.