Definition
Remaining Performance Obligation (RPO) refers to the total contracted revenue a company is obligated to deliver in the future-based on signed customer agreements.
It includes both:
- Deferred revenue: Invoiced but not yet recognized
- Unbilled revenue: Committed but not yet invoiced
RPO is a forward-looking metric that signals future revenue visibility, especially critical in long-term SaaS and subscription deals.
Why RPO matters
RPO vs. other metrics
RPO breakdown
RPO is often split into:
- Current RPO: Revenue expected to be recognized in the next 12 months
- Non-current RPO: Revenue expected beyond 12 months (multiyear deals)
Example: A 3-year SaaS contract worth $300,000 might have:
- $100,000 already invoiced (deferred revenue)
- $200,000 unbilled commitment
→ Total RPO = $300,000
RPO in SaaS financials
- Typically reported in 10-Ks and 10-Qs for public companies under ASC 606
- Gives analysts insight into contract duration, customer commitment, and future growth potential
- High RPO + slow revenue recognition? May signal implementation or usage delays
Final takeaway
A growing RPO shows that customers are committing for the long haul. A declining one may signal short-termism, renewal risk, or shifting market confidence. For GTM, finance, and board discussions alike, RPO helps connect today’s bookings to tomorrow’s revenue.
