RPO (remaining performance obligations): definition, calculator and examples
What are remaining performance obligations (RPO)?
Remaining performance obligations (RPO) are revenue a company has under contract but hasn't yet recognized: deferred revenue already billed, plus non-cancellable amounts still to be invoiced. Current RPO (cRPO) is the part due within 12 months. A $36,000 three-year contract billed $12,000 a year has $24,000 of RPO after year one.
Key facts
- US GAAP requires public companies to disclose "The aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied)" and when they expect to recognize it. (FASB, 2014)
- Only the enforceable term counts. PwC: the disclosure covers "the noncancellable contract term", so expected renewals stay out. (PwC)
- Private companies "may elect not to provide the disclosures", so RPO is mostly a public-company number, though any company can calculate it. (FASB, 2014)
- Salesforce first reported the 12-month slice in May 2018 and renamed it current remaining performance obligation (cRPO) that August. (Salesforce, Aug 2018)
- Oracle's RPO reached $664 billion in August 2026, but it expects to recognize only about 13% within 12 months. (Oracle 10-Q, Sep 2026)
RPO calculator
Enter deferred revenue from your balance sheet, the unbilled value of signed, non-cancellable contracts, and the share you expect to recognize in the next 12 months. Leave out renewals you expect but haven't signed.
Want to see when contracted revenue turns into cash? CX Cash is being built to forecast expected inflows from your billing data, alongside payroll and other outflows.
How to calculate RPO
RPO = Deferred revenue + Unbilled non-cancellable contract value
In words: add revenue you've billed but not yet earned to contracted revenue you haven't billed yet.
- Deferred revenue: Amounts billed or paid in advance but not yet earned. It sits on the balance sheet as a liability.
- Unbilled contract value: Signed, non-cancellable amounts still to be invoiced. Salesforce: "The portion of RPO that is unbilled is not recorded on the condensed consolidated balance sheets."
- Current RPO (cRPO): The part of RPO expected to become revenue within 12 months. The rest is non-current RPO.
Worked example
An illustrative customer on a three-year, $36,000 contract, billed $12,000 at the start of each year, six months in. $6,000 of this year's invoice is not yet earned, and two years ($24,000) are not yet billed. The results below are computed by the calculator's tested code.
| Input | Value |
|---|---|
| Deferred revenue | $6,000 |
| Unbilled contract value | $24,000 |
| Share expected within 12 months (%) | 40% |
RPO: 30,000 Current RPO (next 12 months): 12,000Share not yet billed: 80.0%
RPO = 6,000 + 24,000 = 30,000
RPO of $30,000, of which $12,000 is current. Only $6,000 is on the balance sheet; the other $24,000 is contracted but unbilled, which is why RPO runs well above deferred revenue on multi-year deals. If the customer could cancel on a month's notice without penalty, RPO would be one month's revenue, $1,000 (our arithmetic, following PwC's example).
In a spreadsheet
- RPO, with deferred revenue in B2 and unbilled contract value in C2: =B2+C2
- Current RPO, with the share due within 12 months in D2: =(B2+C2)*D2
- Share of RPO due within 12 months, from cRPO in B2 and RPO in C2: =B2/C2
How founders and investors read RPO
If you're the founder
- It shows revenue you've already won. For a company selling multi-year or prepaid contracts, RPO tells investors more than ARR does about what's locked in.
- Billing terms move it. Salesforce: "For multi-year subscription agreements billed annually, the associated unbilled balance and corresponding remaining performance obligation are typically high at the beginning of the contract period, zero just prior to renewal, and increase if the agreement is renewed."
- Private companies needn't disclose it, but later-stage investors ask. Your contract list and deferred revenue balance are all you need.
Questions you'll be asked
- How much of RPO is due in the next 12 months?
- How much could customers cancel without penalty?
- What share comes from your largest customers?
- Is RPO growing faster or slower than revenue?
If you're the investor or LP
- Watch cRPO growth against revenue growth. Salesforce's 2018 Investor Day argued that "cRPO is more consistent than UR and RPO", meaning unearned revenue and total RPO (Salesforce, 2018).
- Check duration. Bernstein's Mark Moerdler asked Microsoft how six-year server spending squares with RPO lasting 2.5 years on average.
- Check concentration. Microsoft disclosed that about 45% of its commercial RPO came from one customer, OpenAI.
Questions to ask the company
- What are the cRPO share and the weighted-average duration?
- How much comes from the top five customers?
- Do any contracts allow termination for convenience?
- Which practical expedients does the company use?
How to judge a company's RPO
There's no "good" level of RPO: it scales with company size and contract length. Judge three things instead: cRPO growth against revenue growth, the share due within 12 months, and concentration. Among large software companies in mid-2026, the 12-month share ran from about 13% at Oracle to about 54% at Snowflake.
Benchmarks
| Segment | Measure | Typical | Top quartile | As of | Sample | Source |
|---|---|---|---|---|---|---|
| Latest reported RPO, mid-2026 · Each company reports under its own definition; shares marked "our arithmetic" divide reported cRPO by RPO. | ||||||
| Salesforce | RPO and cRPO | $66.3B (+11%); cRPO $33.5B (+14%), 51% of RPO (our arithmetic) | — | Q2 FY27 | Company release | Salesforce, Aug 2026 |
| ServiceNow | RPO and cRPO | $29.0B (+21%); cRPO $13.20B, 46% of RPO | — | Q2 2026 | Company release and 10-Q | ServiceNow, Jul 2026 |
| Workday | Subscription revenue backlog | $27.403B (+8.0%); 12-month $9.034B (+14.2%), 33% (our arithmetic) | — | Q2 FY27 | Company release | Workday, Aug 2026 |
| Snowflake | RPO | $9.00B (+30%); about 54% within 12 months | — | Q2 FY27 | Company 10-Q | Snowflake 10-Q, 2026 |
| Microsoft | Commercial RPO | $678B (+84%); about 30% within 12 months | — | FY26 Q4 | Company 10-K | Microsoft 10-K, 2026 |
| Oracle | RPO | $664B (up $209B in a year); about 13% within 12 months | — | Q1 FY27 | Company 10-Q | Oracle 10-Q, Sep 2026 |
Usage-based companies understate future revenue in RPO. Snowflake: "RPO is not necessarily indicative of future product revenue growth because it does not account for the timing of customers' consumption or their consumption of more than their contracted capacity." (Snowflake, 2026)
Size can hide concentration. Microsoft's CFO, January 2026: "Approximately 45% of our commercial RPO balance is from OpenAI."
Compiled Oct 2, 2026. Next review: March 2027, after the next annual reports. Left out: OpenAI's share of Oracle's RPO (Reported from unnamed sources and not disclosed by Oracle, so we leave it out of the figures); Cross-company RPO medians (No dataset we found publishes them). Download these benchmarks as CSV.
RPO in the wild: what six companies leave out
The same GAAP disclosure, drawn at different edges. Each company's own wording from its latest quarterly or annual report. (Salesforce 10-Q, Aug 2026)
| Company | What RPO includes | What it leaves out | Source |
|---|---|---|---|
| Salesforce | "unearned revenue and unbilled amounts" | Renewals not yet signed; on multi-year deals billed annually, RPO falls to zero just before renewal | 10-Q, Aug 2026 |
| ServiceNow | Deferred revenue and non-cancellable amounts to be invoiced, including signed contracts that start later | Contracts "billed in arrears, such as certain time and materials contracts" | 10-Q, Q2 2026 |
| Snowflake | Deferred revenue and non-cancelable contracted amounts | On-demand usage, "as there are no minimum purchase commitments" | 10-Q, Q2 FY27 |
| Workday | Subscription contracts, "billed and unbilled amounts" | Non-subscription revenue; it reports "subscription revenue backlog" | 10-Q, May 2026 |
| Microsoft | Commercial unearned revenue and amounts to be invoiced | Estimates involve judgment, including "potential renegotiation of commitments" | 10-K, FY2026 |
| Oracle | Contracted revenue not yet recognized | Variable consideration allocated entirely to wholly unsatisfied obligations (an optional exemption) | 10-Q, Q1 FY27 |
Six companies, six boundaries. Snowflake's RPO misses usage above commitments, ServiceNow's misses time-and-materials work, Workday's counts only subscriptions, and Oracle's skips some variable fees. Compare RPO growth within a company over time, not RPO levels across companies.
These are the companies' own descriptions, as filed. SEC filings were read from archived copies because sec.gov blocks automated access; the links go to EDGAR.
RPO vs cRPO, deferred revenue, backlog and ARR
| Metric | Answers | Ignores | Use it when | It misleads when |
|---|---|---|---|---|
| RPO | Contracted revenue not yet recognized | Unsigned renewals, cancellable terms, usage above commitments | Gauging how much future revenue is locked in | Contracts are long-dated or concentrated |
| Current RPO (cRPO) | Contracted revenue due within 12 months | Longer-dated commitments | Tracking growth quarter to quarter | Contract lengths change |
| Deferred revenue | Billed or paid, not yet earned | Contract value not yet invoiced | Reading the balance sheet | Billing terms change |
| Backlog | Whatever the company defines it as | A common definition | Reading a single company's commentary | Compared across companies |
| ARR | Annualized recurring revenue today | How long contracts run | Measuring the subscription run-rate | Usage or contract terms swing |
RPO = deferred revenue + unbilled contract value = cRPO + non-current RPO. For a single contract billed in advance, RPO equals the contract value minus the revenue recognized so far.
Common mistakes: how RPO gets misread
- Calling it "not yet paid for". RPO follows revenue recognition, not cash. It includes deferred revenue that customers have already paid, so it isn't a receivable.
- Counting renewals or cancellable terms. Only the non-cancellable term counts. EY: "expected contract renewals that have not been executed and do not represent material rights are not performance obligations".
- Comparing total RPO across companies. Contract length and exemptions differ. A company signing five-year deals shows far more RPO than one signing annual deals at the same revenue.
- Ignoring duration. $664 billion sounds like a lot of revenue, but Oracle expects only about 13% of it within 12 months. Read cRPO and the time bands.
- Ignoring concentration. A few huge contracts can dominate RPO. Ask what share comes from the largest customers and how creditworthy they are.
- Treating backlog as RPO. EY notes "there is no common definition of backlog". Backlog figures in press releases may include amounts RPO excludes.
Where RPO came from and how it's regarded today
| When | What happened | Source |
|---|---|---|
| Sep 2026 | Oracle's RPO of $664 billion beats forecasts: "above StreetAccount's $630.6 billion consensus." | CNBC, 2026 |
| Jan 2026 | Microsoft's CFO discloses that about 45% of its commercial RPO is from OpenAI. | Microsoft, Jan 2026 |
| Sep 2025 | Oracle's RPO jumps 359% to $455 billion. CEO Safra Catz: "Most of the revenue in this 5-year forecast is already booked in our reported RPO." | Oracle, Sep 2025 |
| Nov 2023 | Workday begins headlining its "12-month subscription revenue backlog", a cRPO under another name. | Workday, Nov 2023 |
| Aug 2018 | Salesforce renames its 12-month figure "current remaining performance obligation". | Salesforce, Aug 2018 |
| May 2018 | Salesforce reports "Current remaining transaction price", the earliest 12-month RPO figure we found in EDGAR's full-text search. | Salesforce, May 2018 |
| Jan 2018 | IFRS 15 takes effect, and US public companies adopt ASC 606 for years starting after 15 December 2017. | IFRS 15 |
| Dec 2016 | FASB adds an optional exemption for some variable consideration (ASU 2016-20). | FASB, 2016 |
| Aug 2015 | FASB defers the standard by a year for public companies (ASU 2015-14). | Journal of Accountancy, 2015 |
| May 2014 | FASB and the IASB issue the converged revenue standard, with its disclosure of remaining performance obligations. | IFRS Foundation, 2014 |
How it's regarded today
- A headline number. Analysts now forecast RPO like revenue. CNBC reported Oracle's against a StreetAccount consensus in September 2026.
- Scrutinized for duration and concentration. Moody's analysts, quoted by The Register: "Counterparty risk is always a key consideration in any type of project financing, particularly where there is a high reliance on revenue from a single counterparty" (The Register, 2025).
- Contested as marketing. Critic Ed Zitron argues that RPOs, though standard, "are being used by Oracle as a form of marketing" (Zitron, 2025). An opinion, and a contested one.
- Revenue from Contracts with Customers (Topic 606), ASU No. 2014-09, Section A (FASB, 2014). The disclosure requirement itself (ASC 606-10-50-13), its practical expedients and the private-company election.
- 33.4 Revenue disclosures (Financial statement presentation guide) (PwC). How cancellation rights and renewals change what counts, with worked examples.
- Financial reporting developments, A comprehensive guide: Revenue from contracts with customers (ASC 606) (EY, 2026). Why RPO differs from backlog, and why unexecuted renewals stay out.
What experts say about RPO
“You capitalized servers over six years, but the average duration of your RPO is 2.5 years, up from two years last quarter.”
“That is a significant RPO balance, larger than most peers, more diversified than most peers.”
“Remaining performance obligations, or RPO, called backlog by Google, represent commitments customers make to spend dollars on infrastructure.”
“Most of the revenue in this 5-year forecast is already booked in our reported RPO.”
RPO FAQ
What are remaining performance obligations (RPO)?
Revenue under contract that hasn't been recognized yet: deferred revenue already billed plus non-cancellable amounts still to be invoiced. Public companies disclose it under ASC 606 and IFRS 15.
What is the difference between RPO and cRPO?
cRPO, current RPO, is the part of RPO expected to become revenue within 12 months. The rest is non-current RPO.
Is RPO the same as backlog?
Not quite. RPO has a GAAP definition and sits in the financial statements; backlog is voluntary and defined by each company, so it may include amounts RPO excludes.
Is RPO the same as deferred revenue?
No. Deferred revenue is only what's been billed or paid but not yet earned. RPO adds contracted amounts not yet invoiced, so it's usually larger.
Do private companies have to report RPO?
No. Companies that aren't public business entities may elect not to provide the disclosure, but investors may still ask for it.
Does RPO include renewals?
Only once they're signed. Expected renewals, and any period a customer can cancel without penalty, are excluded.
Why is RPO so much bigger than revenue at some companies?
Long contracts. A company signing five-year commitments carries several years of future revenue in RPO; Oracle's $664 billion is mostly due after the next 12 months.
Related metrics and guides
Sources
Every link was opened and checked. Archived copies guard against links that move or disappear.
Primary data
- Salesforce, Inc. Form 10-Q for the quarter ended July 31, 2026. Salesforce (SEC filing), 27 Aug 2026. Read from the archived copy; sec.gov blocks automated access. Archived copy
- Salesforce Delivers Record Second Quarter Fiscal 2027 Results. Salesforce (earnings release), 26 Aug 2026. Archived copy
- Salesforce Announces Record First Quarter Fiscal 2019 Results. Salesforce (8-K exhibit 99.1), 29 May 2018. Earliest use found by EDGAR full-text search. Archived copy
- Salesforce Announces Record Second Quarter Fiscal 2019 Results. Salesforce (press release), 29 Aug 2018. Archived copy
- Investor Day (presentation). Salesforce (8-K exhibit 99.1), 26 Sep 2018. Archived copy
- ServiceNow Reports Second Quarter 2026 Financial Results. ServiceNow (earnings release), 22 Jul 2026. Archived copy
- ServiceNow, Inc. Form 10-Q for the quarter ended June 30, 2026. ServiceNow (SEC filing), Jul 2026. Read from the archived copy; sec.gov blocks automated access. Archived copy
- Workday Announces Fiscal 2027 Second Quarter Financial Results. Workday (press release), 27 Aug 2026. No archived copy found.
- Workday, Inc. Form 10-Q for the quarter ended April 30, 2026. Workday (SEC filing), 22 May 2026. Read from the archived copy; sec.gov blocks automated access. Archived copy
- Workday Announces Fiscal 2024 Third Quarter Financial Results. Workday (SEC filing), 28 Nov 2023. Archived copy
- Snowflake Inc. Form 10-Q for the quarter ended July 31, 2026. Snowflake (SEC filing), Sep 2026. Read from the archived copy; sec.gov blocks automated access. Archived copy
- Snowflake Reports Financial Results for the Second Quarter of Fiscal 2027. Snowflake (earnings release on Nasdaq.com), 2 Sep 2026. Syndicated copy; no archived copy found.
- Microsoft Corporation Form 10-K for the fiscal year ended June 30, 2026. Microsoft (SEC filing), Jul 2026. Read from the archived copy; sec.gov blocks automated access. Archived copy
- Microsoft Fiscal Year 2026 Second Quarter Earnings Conference Call. Microsoft (transcript), 28 Jan 2026. Company transcript of the call. Archived copy
- Oracle Corporation Form 10-Q for the quarter ended August 31, 2026. Oracle (SEC filing), Sep 2026. Read from the archived copy; sec.gov blocks automated access. Archived copy
- Oracle Announces Fiscal Year 2026 First Quarter Financial Results. Oracle (8-K exhibit 99.1), 9 Sep 2025. Read from the archived copy; sec.gov blocks automated access. Archived copy
Standard
- Revenue from Contracts with Customers (Topic 606), ASU No. 2014-09, Section A. Financial Accounting Standards Board, May 2014. Archived copy
- Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers (ASU No. 2016-20). Financial Accounting Standards Board, Dec 2016. Archived copy
- IFRS 15 Revenue from Contracts with Customers. IFRS Foundation, Issued May 2014 (2025 consolidated text). Archived copy
- IASB and FASB issue converged Standard on Revenue Recognition. IFRS Foundation, 28 May 2014. Archived copy
Consultancy
- 33.4 Revenue disclosures (Financial statement presentation guide). PwC Viewpoint, Current edition. Undated live guidance; no archived copy found.
- Financial reporting developments, A comprehensive guide: Revenue from contracts with customers (ASC 606). EY, Sep 2026. No archived copy found.
Practitioner
- $555B of Cloud Spend. Tomasz Tunguz, 30 Oct 2025. Archived copy
- Oracle and OpenAI Are Full Of Crap. Ed Zitron (Where's Your Ed At), 12 Sep 2025. Opinion, contested; partly paywalled. Archived copy
News
- FASB formally issues revenue recognition delay. Journal of Accountancy (AICPA), 12 Aug 2015. Archived copy
- Oracle (ORCL) Q1 earnings report 2027. CNBC, 10 Sep 2026. Archived copy
- Moody's raises questions over Oracle's AI DC expansion plans. The Register, 22 Sep 2025. Quotes a Moody's note that is subscription-only. Archived copy
Changes to this page
- · Major · Rewritten and moved here from our earlier article on RPO, deferred revenue and backlog. Figures compiled 2 October 2026.
- · Major · First published as "Remaining Performance Obligations and What Companies Leave Out".
Cite this page
Dominique Bouillet, "RPO (remaining performance obligations): definition, calculator and examples", CX Cash, updated Oct 6, 2026, https://cxcash.com/metrics/rpo
CX Cash builds software for founders and investors. This page is education, not investment or accounting advice. Third-party figures link to their source, and our own arithmetic and illustrative examples are labelled as such.