What is guidance?
Guidance is the set of ranges management gives investors for future revenue, earnings or other metrics, usually for the next quarter or the full fiscal year. Companies have no legal duty to give it; many do, with quarterly results. Regulation FD means guidance goes to everyone at once. The SEC has warned that privately signaling to an analyst whether earnings will beat or miss forecasts likely violates the rule.
Why it matters to a revenue leader
Guidance turns the CRO's forecast into a public promise. The CFO usually builds the revenue range from contracted work, renewals and backlog, then adds the new business the sales forecast supports, plus a judgment on risk. If the forecast is unreliable, the company either guides low and looks timid or guides high and risks a miss. Either way, the cost of forecast error lands on the CEO and CFO in front of investors.
Example
Fictitious numbersA public testing and inspection company guides full-year revenue of $1.20 billion to $1.24 billion. The CFO built the range from $1.05 billion of contracted and recurring work plus $150 million to $190 million of new work the sales forecast supports. Every $10 million of new work that slips to next year moves the company toward the bottom of the range.
"How much of our guidance range rests on deals that are still open in my pipeline today?"
Sources
- Company Guidance: What Investors Need to Know checked 9 Oct 2026
- Selective Disclosure and Insider Trading (Regulation FD adopting release) checked 9 Oct 2026