Gross Bookings
Total contract value signed in a period before deducting churn or contraction.
What it counts
Gross bookings is the total value of contracts signed in a period, before any deduction for cancellations, downgrades or non-payment. It measures selling activity — what the team put on paper — rather than what the business will collect.
The figure is only interpretable alongside its basis. Total contract value, annualised value and first-year value produce very different numbers from the same contracts, and a three-year deal counted at full TCV can make a quarter look transformative while adding the same annual revenue as a one-year deal at a third the size.
State the basis or the number is not comparable
How to report it usefully
Fix the basis in writing and keep it constant. Changing from annualised to total contract value mid-year produces growth that did not happen.
Report gross and net side by side. The gap between them is your cancellation and downgrade rate, and it is invisible in either figure alone.
Separate new business from renewals and expansion. A bookings figure that blends them cannot tell you whether acquisition is working.
Show contract length distribution alongside the total. A shift towards multi-year deals inflates TCV bookings without any change in run-rate revenue.
Reconcile to recurring revenue. If bookings grow while net new ARR is flat, the difference is either contract length, services, or churn absorbing the wins.
Where it misleads
It ignores whether the money arrives. A booking from a customer who never pays counts in full, which is why bookings-based commission needs a clawback provision.
Multi-year deals distort period comparisons badly on a TCV basis, and the distortion is largest exactly when a big deal lands.
One-off services bundled into bookings make the figure jump with delivery work rather than with the subscription base.
Gross bookings says nothing about margin. A quarter bought with heavy discounting looks identical to an efficient one.
RELATED TERMS
Annual Recurring Revenue (ARR)
The annualised value of recurring subscription revenue at a point in time. A run rate, not a measure of revenue earned during a period.
Bookings
The total value of contracts signed in a period, regardless of when revenue is recognised or cash collected.
Net New ARR
The change in ARR over a period: new plus expansion minus contraction minus churn. The headline growth number.
Total Contract Value (TCV)
The full value of a contract across its entire term, including non-recurring elements.
COMMON QUESTIONS
- What are gross bookings?
- The total contracted value signed in a period before any deduction for cancellations, downgrades or non-payment. It measures what the sales team put on paper rather than what the business will collect, which makes it a useful activity measure and a poor revenue measure.
- What is the difference between gross and net bookings?
- Net bookings deducts cancellations, downgrades and, depending on the definition, deals that fail to pay. The gap between gross and net is your cancellation and downgrade rate — which is invisible if you only report one of them. Reporting both is the cheapest way to surface a quality problem in what is being sold.
- Are bookings the same as revenue?
- No, and conflating them is a common and expensive error. Bookings record what was contracted at the moment of signature; revenue is recognised as the service is delivered, over the contract term. A strong bookings quarter can produce very little revenue in that quarter — particularly with multi-year or annual-in-advance contracts.
- Should bookings use total contract value or annual value?
- Either, provided it is stated and held constant. TCV rewards long contracts and makes period comparisons volatile; annualised value is more stable and comparable to recurring revenue. The damaging option is switching between them, which manufactures growth that did not happen — so write the basis down where the report is defined.
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