A booking occurs when a customer enters into a contract to use a company's product or service. It reflects the total amount a customer commits to giving to the company over a defined period. The booking stage occurs before any billing or service offering.
Example
Suppose a customer signs a 3-year, $15M contract with Vareto. Here, the bookings are worth $15M since this is the amount that the customer agrees to pay at a future date for using the company's products/services.
Why it matters
Bookings are used as an indicator of how much revenue an existing business area will generate for the company. It also tells the company the potential revenues that a new business area may bring in the future.
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