A floating license is a network license. It may be used on a network so that any client on the network may acquire a token.

The license server has a list of all the floating licenses installed to it and, for each one, whether it is in use. When a user runs Houdini it checks out the license to their computer and the license server marks it as in use. When they close Houdini it checks the license back in and the license server marks it as available. When a different user runs Houdini they might check out the same license, so the license is said to float from computer to computer.