Financial statements

Deferred revenue

Cash collected for goods or services not yet delivered, held as a liability until the revenue is earned.

Owned by: AnalystTest band: Analyst

In practice

A growing deferred revenue balance is a good sign for a subscription business — cash in ahead of revenue. It also means the cash is spoken for.

A customer pays $12k up front for a one-year subscription in January. At the end of March, deferred revenue for this contract is…