Remaining Performance Obligation (RPO)

Remaining Performance Obligation (RPO) is an indicator of a business’s future revenues. It’s essentially the total amount of money that all current customers are contractually bound to spend on its products and/or services in the future.

More specifically, RPO is the sum of all invoiced amounts and any future amounts that have not yet been invoiced for under a contract with a customer. Amounts that have already been invoiced but have not yet been paid will typically be reported on the balance sheet as deferred revenue.

As RPO concerns signed contracts, they’re legally binding and provide a high-level overview of what the revenue pipeline should look like, assuming all payments are made in full and on time.

Remaining Performance Obligation (RPO) Explained: