Remaining performance obligations
Remaining performance obligations, usually shortened to RPO, is the total contracted revenue a business has not yet recognised, covering both amounts already invoiced and amounts still to be billed under signed contracts.
Also called rpo.
RPO is a forward-looking measure of committed revenue. It is broader than deferred revenue, which counts only what has been billed, so it captures the value of multi-year contracts not yet invoiced.
For a usage-based business, what lands in RPO is generally the committed portion of a contract rather than forecast consumption above it, which is one reason minimum commitments matter beyond cash predictability.
Common questions
- What is the difference between RPO and deferred revenue?
Deferred revenue counts only amounts already invoiced and not yet earned. RPO counts all contracted revenue not yet recognised, including amounts that have not been invoiced, so RPO is normally the larger figure.
- Does usage-based revenue count towards RPO?
Generally only the committed portion does. Consumption a customer is forecast to buy above their commitment is not contracted, so it is excluded, which is one reason minimum commitments matter beyond cash predictability.