Billings measures the total amount a company billed customers during the trailing twelve months, regardless of when the revenue will be recognized. It is calculated by adding the change in deferred revenue to recognized revenue. Billings is a key metric for subscription and SaaS businesses because it captures demand timing better than recognized revenue, which may lag behind actual customer commitment.
When billings exceed revenue, the company is collecting cash faster than it recognizes revenue — deferred revenue is growing. When billings fall below revenue, deferred revenue is being drawn down.
Billings = Revenue (TTM) + (Deferred Revenue current − Deferred Revenue 1 year ago)
GeminIQ computes billings as TTM revenue plus the year-over-year change in deferred revenue (current balance minus the balance four quarters ago). All inputs are from SEC filings.
A: Revenue recognition for subscription businesses is spread over the contract term. A company that signs a $120K annual contract in January recognizes $10K/month in revenue. Billings captures the full $120K at the time of the contract, giving a more real-time view of demand. Billings growth that exceeds revenue growth indicates accelerating demand.
A: It means the company is recognizing more revenue than it is billing — deferred revenue is declining. This can happen when contract renewals slow down, customers shift to shorter terms, or a large cohort of multi-year contracts signed in the past are being recognized now without equivalent new signings.
A: Billings is a derived metric, not a reported line item. Different platforms may calculate it differently. GeminIQ uses the year-over-year change in the deferred revenue balance (shifted by four quarters, not a rolling sum) added to TTM revenue.