Revenue Recognition

3 Months Ended

Oct. 31, 2019

Revenue Recognition and Deferred Revenue [Abstract]

Revenue Recognition

Note 2—Revenue Recognition

The Company earns revenue from contracts with customers, primarily through the provision of retail telecommunications and payment offerings as well as wholesale international long-distance traffic termination. The Company has two reportable business segments, Telecom & Payment Services and net2phone. The Telecom & Payment Services segment is comprised of Core and Growth verticals. Core includes BOSS Revolution Calling, an international long-distance calling service marketed primarily to immigrant communities in the United States, Carrier Services, which provides international long-distance termination and outsourced traffic management solutions to telecoms worldwide, and Mobile Top-Up, which enables customers to transfer airtime and bundles of airtime, messaging and data credits to mobile accounts internationally and domestically. Core also includes smaller communications and payment offerings, many in harvest mode. Growth includes National Retail Solutions, which operates a point-of-sale terminal-based network for retailers, BOSS Revolution Money Transfer, an international money remittance service for customers in the United States, and BOSS Revolution Mobile, a mobile virtual network operator in the United States. The net2phone segment is comprised of net2phone-Unified Communications as a Service ("UCaaS"), a unified cloud-based communications service for businesses in North and South America and certain other international markets, and net2phone-Platform Services, which provides telephony services to cable operators and other businesses by leveraging a common technology platform.

The Company's core operations are mostly minute-based, paid-voice communications services, and revenue is primarily recognized at a point in time. The Company's Telecom & Payment Services' growth initiatives and net2phone-UCaaS are technology-driven, synergistic businesses that leverage the Company's core assets, and revenue, in some cases, is recognized over time. The Company's most significant revenue streams are from BOSS Revolution Calling, Mobile Top-Up, and Carrier Services. BOSS Revolution Calling and Mobile Top-Up are sold direct-to-consumers and through distributors and retailers.

Disaggregated Revenues

The following table shows the Company's revenues disaggregated by business segment and service offered to customers:

	Three Months Ended October 31,
	2019		2018
	(in thousands)
Core Operations:
BOSS Revolution Calling	$	116,242	$	123,513
Carrier Services		113,517		142,222
Mobile Top-Up		76,815		65,346
Other		11,244		14,757
Growth		9,800		6,011
Total Telecom & Payment Services		327,618		351,849
net2phone-UCaaS		7,221		4,805
net2phone-Platform Services		5,406		5,662
Total net2phone		12,627		10,467
Total	$	340,245	$	362,316

The following table shows the Company's revenues disaggregated by geographic region, which is determined based on selling location:

(in thousands)	Telecom & Payment Services		net2phone		Total
Three Months Ended October 31, 2019
United States	$	218,655	$	8,532	$	227,187
Outside the United States:
United Kingdom		35,793		4		35,797
Netherlands		54,942		—		54,942
Other		18,228		4,091		22,319
Total outside the United States		108,963		4,095		113,058
Total	$	327,618	$	12,627	$	340,245

(in thousands)	Telecom & Payment Services		net2phone		Total
Three Months Ended October 31, 2018
United States	$	231,624	$	7,930	$	239,554
Outside the United States:
United Kingdom		50,472		8		50,480
Netherlands		50,922		—		50,922
Other		18,831		2,529		21,360
Total outside the United States		120,225		2,537		122,762
Total	$	351,849	$	10,467	$	362,316

Remaining Performance Obligations

The Company's revenue is generally recognized in the same period that its performance obligations are satisfied. The Company does not have any significant revenue from performance obligations satisfied or partially satisfied in previous reporting periods, or any significant portion of transaction price to be allocated to performance obligations that are unsatisfied (or partially unsatisfied) at the end of a reporting period.

Accounts Receivable and Contract Balances

The timing of revenue recognition may differ from the time of billing to the Company's customers. Trade accounts receivable in the Company's consolidated balance sheets represent unconditional rights to consideration. An entity records a contract asset when revenue is recognized in advance of the entity's right to bill and receive consideration. The Company has not identified any contract assets.

Contract liabilities arise when the Company receives consideration or bills its customers prior to providing the goods or services promised in the contract. The primary component of the Company's contract liability balance is the payments received for its prepaid BOSS Revolution Calling, traditional calling cards, and Mobile Top-Up services. Contract liabilities are recognized as revenue when services are provided to the customer. The contract liability balances are presented in the Company's consolidated balance sheet as "Deferred revenue".

The following table presents information about the Company's contract liability balance:

	Three Months Ended October 31,
	2019		2018
	(in thousands)
Revenue recognized in the period from amounts included in the contract liability balance at the beginning of the period	$	29,112	$	28,506

Deferred Customer Contract Acquisition and Fulfillment Costs

The Company incurs incremental costs of obtaining a customer contract, it does not incur direct costs to fulfill contracts. The Company's incremental costs of obtaining a customer contract are sales commissions paid to acquire customers. For Telecom & Payment Services, the Company applies the practical expedient whereby the Company primarily charges these costs to expense when incurred because the amortization period would be one year or less for the asset that would have been recognized from deferring these costs. For net2phone-UCaaS sales, employees and third parties receive commissions on sales to end users. The Company amortizes the deferred costs over the expected customer relationship period when it is expected to exceed one year.

The Company's deferred customer contract acquisition costs were as follows:

	October 31, 2019		July 31, 2019
	(in thousands)
Deferred customer contract acquisition costs included in "Other current assets"	$	1,754	$	1,474
Deferred customer contract acquisition costs included in "Other assets"		1,916		1,716
Total	$	3,670	$	3,190

The Company's amortization of deferred customer contract acquisition costs during the periods were as follows:

	Three Months Ended October 31,
	2019		2018
	(in thousands)
Amortization of deferred customer contract acquisition costs	$	551	$	—