Remaining performance obligations (RPO)
Contracted revenue a company has not yet recognized as of a reporting date, including amounts not yet billed.
RPO is the total value of signed contracts for goods or services that have not yet been delivered and recognized as revenue. It includes both billed amounts that are deferred and unbilled amounts. Companies disclose the total and often the portion they expect to recognize within 12 months.
Traders care because RPO gives visibility into future revenue. It is not a forecast, though, since contracts can include cancellation rights, usage-based terms or long ramps. Compare RPO growth with revenue growth, and check the share due in the next 12 months.
Worked example (illustrative numbers, not real data): a software company reports RPO of 900 million dollars, with 40 percent expected within 12 months. That implies 360 million dollars of near-term contracted revenue, before any cancellations.