Revenue: It’s Simple, Until It Isn’t

Finally, a clear explanation of bookings, billings and revenue

Image Source: Pixabay / Pexels

The TL;DR

  • We are experimenting with a new series that dives into financial metrics and their importance
  • Revenue is deceptively complicated and has numerous permutations that can give you insight into your business
  • Recurring revenue is the best type of revenue and everyone wants it

Why bother to do this? 

We are continuing our experiment that we are colloquially calling “Finance, but useful.” The first post was on cash conversion cycle.

Most financial knowledge resources online are written for those with long attention spans (not us) or for students looking to pass their Finance 101 class (also not us.) Very little financial writing exists for non-finance leaders. Our goal is to help you understand what the key metrics are and why they matter for your business. 

People not grasping financial statements is a plague in today’s business environment. From WeWork’s infamous “community adjusted EBITDA” to Robinhood traders propping up Nikola’s stock price over that of Ford despite having 0 dollars in revenue, we are perhaps overdue for a re-education. 

The series (if you folks like it enough!) will walk through various key financial metrics and contextualize them so you can operate, invest, or evaluate opportunities with a higher degree of skill.

Today we will discuss the thing we all love to either completely ignore or completely over-index on - revenue.

This post is for
paying subscribers

Subscribe →

Or, learn more.

Read this next:

Napkin Math

Should you invest in Wish? An S-1 Analysis

A look inside the S-1 of Wish. Included is the background of Wish, a look at their margins, how the universal postal union is changing their cost structure, how their CAC is rising and if they are viable long-term.

84 Dec 1, 2020 by Adam Keesling

Napkin Math

Why MasterClass Isn’t Really About Mastery

And other lessons from a 9-figure edtech startup

89 Jul 1, 2020 by Adam Keesling

Napkin Math

Product-Led Growth’s Failure

How a Scrappy Utah Software Company Ignored Every Silicon Valley Heuristic and Won Anyway

87 Jun 3, 2021 by Evan Armstrong

Divinations

Human Speculation

BitClout is a new service that allows anyone to create a publicly-tradable token. Will it work? What effect could it have?

13 🔒 Apr 1, 2021 by Nathan Baschez

Napkin Math

You Probably Shouldn’t Work at a Startup

It’s overrated—both financially and emotionally

114 May 20, 2021 by Evan Armstrong