Revenue from Contracts with Customers

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

Revenue from Contracts with Customers

Disaggregation of Revenue

The following table summarizes revenue:

	Three Months Ended						Six Months Ended
(in thousands, except percentages)	June 30, 2023			June 30, 2022			June 30, 2023			June 30, 2022
Revenue:
Subscription lease licenses	$	134,999		$	135,031		$	282,921		$	226,488
Perpetual licenses	69,898			73,950			141,128			139,938
Software licenses	204,897			208,981			424,049			366,426
Maintenance	273,692			247,635			542,285			494,876
Service	18,010			17,234			39,712			37,625
Maintenance and service	291,702			264,869			581,997			532,501
Total revenue	$	496,599		$	473,850		$	1,006,046		$	898,927
Direct revenue, as a percentage of total revenue	71.2		%	73.7		%	73.8		%	73.1		%
Indirect revenue, as a percentage of total revenue	28.8		%	26.3		%	26.2		%	26.9		%

Our software license revenue is recognized up front, while maintenance and service revenue is generally recognized over the term of the contract.

Deferred Revenue

Deferred revenue consists of billings made or payments received in advance of revenue recognition from customer agreements. The timing of revenue recognition may differ from the timing of billings to customers. Payment terms vary by the type and location of customer and the products or services offered. The time between invoicing and when payment is due is not significant.

The changes in deferred revenue, inclusive of both current and long-term deferred revenue, during the six months ended June 30, 2023 and 2022 were as follows:

(in thousands)	2023		2022
Beginning balance – January 1	$	435,758	$	412,781
Acquired deferred revenue	7,910		1,032
Deferral of revenue	961,520		888,130
Recognition of revenue	(1,006,046)		(898,927)
Currency translation	(2,636)		(19,394)
Ending balance – June 30	$	396,506	$	383,622

Total revenue allocated to remaining performance obligations as of June 30, 2023 will be recognized as revenue as follows:

(in thousands)
Next 12 months	$	810,219
Months 13-24	330,640
Months 25-36	121,272
Thereafter	33,667
Total revenue allocated to remaining performance obligations	$	1,295,798

Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes both deferred revenue and backlog. Our backlog represents deferred revenue associated with installment billings for periods beyond the current quarterly billing cycle and committed contracts with start dates beyond the end of the current period. Revenue recognized during the six months ended June 30, 2023 and 2022 included amounts in deferred revenue and backlog at the beginning of the period of $527.9 million and $437.2 million, respectively.