Billings
Revenue recognized plus the change in deferred revenue; what the company actually invoices customers.
Definition
Billings represent the total amount invoiced to customers in a period. Billings equal revenue plus the change in deferred revenue. When a customer pays annually upfront, the full amount is billed immediately but revenue is recognized monthly over the year. Billings are a useful metric because they capture both recognized revenue and cash collected upfront from future commitments.
Why it matters
Billings can be a better indicator of business momentum than reported revenue, especially for companies with long-term contracts. Rising billings relative to revenue means customers are prepaying for longer terms, a sign of confidence.
Example
A company recognizes $2M in revenue this quarter and deferred revenue increases by $500K (from upfront annual payments). Billings = $2M + $500K = $2.5M. The extra $500K represents future revenue already paid for.