What is new bookings in a SaaS business?
New Bookings typically refers to the portion of bookings attributed to new customers, or more specifically new contracts with new or existing customers. For example, ABC, Inc. has been a client since 2005, but a new division signed a new term agreement. The bookings associated with this new division are new bookings. Also typically included in new bookings are upgrades and contract increases from cross-selling.
How do you calculate new bookings in a SaaS business?
When New Bookings is used as a metric for compensation and incentives, certain negative adjustments may be included. These might include items like downgrades and early contract terminations, with the logic being that if someone is being compensated on a new contract that actually cancels prematurely, the value is debited to reflect actual performance.