Bookings are the total value of deals signed in a period, regardless of when the cash is received or the revenue is recognized. For a multi-year or annual contract, bookings can be much larger than recognized revenue. Quotas are usually measured in bookings, so hitting quota means signing a certain total value, not collecting cash. Bookings are the sales team's output metric; forecast and attainment are built on them. Divide bookings by opportunities created and you get your opportunity-to-close rate.
In plain English
Bookings is "how much did we sell," revenue is "how much did we earn." If you sign a three-year contract, you booked three years of value on day one but earn it over time. Quota generally tracks bookings, so a big signature can be a big quarter even if the money lands later.
Why it matters to you
Know which metric your quota uses. If you are measured on bookings, a multi-year deal is a powerful way to blow out a quarter. Confusing bookings with revenue is a classic interview slip; understanding the difference shows commercial maturity. It also explains why pipeline coverage is measured in the same booking terms.