Glossary term
Remaining Performance Obligations (RPO)
The total value of contracted revenue a company has not yet recognised — its backlog under accounting rules. A large RPO signals future revenue, but its value depends on how long it takes to convert and on the discount rate applied while it waits.
AI-generated — produced automatically by Closelook’s systems under this site’s editorial policy.
What it means
Remaining performance obligations is the accounting term (ASC 606) for revenue a company has signed contracts for but has not yet delivered and booked. Software and cloud companies report it every quarter; the portion expected within twelve months is disclosed separately as current RPO. It differs from bookings (new contracts signed in the period) and from deferred revenue (cash received in advance).
RPO is a claim on the future, and the future has a price. A backlog that converts over five years is worth less at a 2.6% real yield than at 1.5%, and worth less again if the customer can defer delivery.
Why it matters for the AI trade
Oracle’s RPO reached $664 billion in the quarter reported on 10 September 2026, driven by multi-year cloud-infrastructure contracts. The market sold the stock anyway: the backlog is financed with debt, its conversion depends on data centres not yet built, and the ten-year real yield had risen 28 basis points in twelve sessions. A managed frontier — the labs’ pacing call two days later — lengthens the conversion time of every AI backlog. RPO is where the demand story and the discount-rate story meet.
How Closelook uses it
The print record scores what the market pays for a backlog on the third close after the report; the credit stress tape shows what it costs to carry it. The bookings versus revenue entry covers the related timing question for software.
Common questions
- Is RPO the same as backlog?
- In practice yes for software and cloud companies; RPO is the defined accounting version. Industrial companies still say backlog and may include unsigned orders that RPO would exclude.
- Why can a stock fall on record RPO?
- Because the market discounts the backlog: a longer conversion time, a higher real interest rate, or doubt about the customer’s ability to take delivery all reduce the present value of the same number. Oracle’s September 2026 print is the reference case.
- What is current RPO?
- The part of RPO the company expects to recognise as revenue within the next twelve months. It is the better guide to next year’s growth; total RPO is the better guide to how long the money is tied up.