Remaining performance obligations represent the total contracted revenue a company has not yet recognized. ASC 606 requires filers to disclose the aggregate amount and when they expect to recognize it.

Remaining performance obligations is the disclosure that finally put a standardized number on what businesses used to call "backlog." Introduced by the revenue-recognition standard Accounting Standards Codification Topic 606, RPO captures the total transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the reporting date. In plain terms, it is contracted revenue the company has not yet booked—and unlike deferred revenue, it includes amounts not yet invoiced, making it a broader measure of committed demand.

Because RPO sweeps in both billed and unbilled commitments, it is typically much larger than the deferred-revenue balance and is closely watched as a forward indicator. Salesforce, whose subscription model makes RPO a headline metric, quantified its total RPO in its fiscal 2026 annual report and tied it directly to future revenue under contract.

"Total remaining performance obligation, which represents all future revenue under contract yet to be recognized, as of January 31, 2026 was approximately $72.4 billion, an increase of 14 percent year-over-year."— Salesforce, Inc. Form 10-K (FY2026), source

What ASC 606 actually requires

The standard requires more than a single number. Filers must disclose the aggregate amount of the transaction price allocated to remaining performance obligations and provide an explanation of when they expect to recognize that amount as revenue—either on a quantitative time-band basis or through qualitative disclosure. Companies commonly split RPO into a current portion expected within twelve months and a longer-tail portion, which lets readers gauge how front-loaded the contracted revenue is.

RPO is not confined to software. EMCOR Group, an engineering and construction-services firm, reports remaining performance obligations as the contract-backlog equivalent under ASC 606, disclosing the balance by reportable segment and noting that it increased to roughly $8.85 billion at year-end 2023 from $7.46 billion a year earlier. The company is explicit that the figure represents unrecognized revenue to be realized from uncompleted contracts and that it can be subject to cancellation, which is the standard caveat readers should carry into any RPO number.

For analysts, RPO’s value is that it is harder to manage than a single quarter of bookings and captures multi-year commitments that the income statement reveals only slowly. Its limits matter too: contracts can be cancelable, recognition timing depends on delivery, and a growing RPO does not guarantee a growing income statement if the work is back-end loaded. Read as ASC 606 frames it—contracted, unrecognized, and time-banded—RPO is one of the cleanest forward-looking figures a subscription or project-based filer discloses.

RPO versus deferred revenue versus bookings

The cleanest way to place RPO is to nest the three measures. Deferred revenue is the narrowest: only amounts already billed and collected but not yet recognized. RPO is broader: it adds the unbilled portion of signed contracts, so it equals deferred revenue plus the committed revenue a company has not yet invoiced. Bookings, by contrast, are not a financial-statement figure at all and are defined by each company as it chooses, which is why RPO—anchored in the ASC 606 disclosure framework—is generally the more comparable and auditable forward indicator across filers.

Current RPO, the portion expected to convert to revenue within twelve months, often carries more analytical weight than the total. Because long-tail RPO can stretch across multi-year enterprise agreements whose timing is uncertain, the near-term slice is a tighter read on the next year of revenue. Salesforce and many subscription peers report current RPO alongside the total for exactly this reason, and quarter-over-quarter changes in current RPO are watched as a demand signal that is less noisy than a single quarter of recognized revenue.

There are caveats every RPO reader should internalize. The standard permits certain practical expedients—for instance, contracts with an original expected duration of one year or less may be excluded from the disclosure, and some usage-based or variable-consideration arrangements are not fully captured. Cancellation provisions, as EMCOR notes for its construction contracts, mean a reported RPO is a contractual expectation, not a guarantee. The figure is a strong forward indicator precisely because it is grounded in signed contracts, but it is an expectation of revenue, not revenue itself, and the recognition-timing disclosure is what tells a reader how patient they need to be.

To work with RPO from a real filing, find the revenue or contract-balances note in a 10-K or 10-Q, where the standard requires the aggregate transaction price allocated to remaining performance obligations and a statement of expected recognition timing. Pair that figure with the deferred-revenue balance from the balance sheet: the difference approximates the unbilled committed revenue, and the ratio of current RPO to trailing revenue gives a rough sense of forward coverage. Tracking total and current RPO across several quarters—rather than reacting to a single print—filters out the lumpiness of large enterprise renewals and surfaces the underlying direction of contracted demand. Used that way, RPO becomes the steadiest forward indicator a subscription or project-based company publishes, anchored not in a self-defined bookings number but in the audited ASC 606 disclosure framework. Because that framework applies uniformly to public filers, RPO also enables cleaner cross-company comparison than legacy backlog figures ever allowed, which is part of why it has become a headline metric for the largest subscription businesses and a standard input to revenue forecasting.