Incremental Costs to Obtain a Contract with a Customer

9 Months Ended

Sep. 30, 2018

Revenue from Contract with Customer [Abstract]

Incremental Costs to Obtain a Contract with a Customer

The following table summarizes the deferred costs associated with obtaining customer contracts, specifically commission and incentive payments, as of September 30, 2018 and December 31, 2017 (in thousands):



	September 30, 2018		December 31, 2017
Deferred costs included in prepaid and other current assets	$	38,929	$	35,044
Deferred costs included in other assets	24,064		23,536
Total deferred costs	$	62,993	$	58,580

During the three and nine months ended September 30, 2018, the Company recognized $11.2 million and $32.9 million, respectively, of amortization expense related to deferred commissions. During the three and nine months ended September 30, 2017, the Company recognized $9.3 million and $27.3 million, respectively, of amortization expense related to deferred commissions. Amortization expense related to deferred commissions is primarily included in sales and marketing expense in the consolidated statements of income.

Revenue from Contracts with Customers

The Company sells its services through a sales force located both domestically and abroad. Revenue derived from operations outside of the U.S. is determined based on the country in which the sale originated. Other than the U.S., no single country accounted for 10% or more of the Company’s total revenue for any reported period. The following table summarizes revenue by geography included in the Company’s consolidated statements of income for the three and nine months ended September 30, 2018 and 2017 (in thousands):



	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2018		2017		2018		2017
U.S.	$	412,573	$	412,348	$	1,249,041	$	1,211,454
International	257,055		212,092		752,070		619,111
Total revenue	$	669,628	$	624,440	$	2,001,111	$	1,830,565

While the Company sells its services through a geographically dispersed sales force, it manages its customer relationships in two divisions: the Web Division and the Media and Carrier Division. Customers are assigned to a division for relationship management purposes according to their predominant purchasing activity; however, customers may purchase solutions managed by the other division as well. The following table summarizes revenue by division included in the Company’s consolidated statements of income for the three and nine months ended September 30, 2018 and 2017 (in thousands):



	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2018		2017		2018		2017
Web Division	$	356,856	$	329,684	$	1,060,777	$	950,580
Media and Carrier Division	312,772		294,756		940,334		879,985
Total revenue	$	669,628	$	624,440	$	2,001,111	$	1,830,565

Most content delivery and security services represent obligations that are satisfied over time as the customer simultaneously receives and consumes the services provided by the Company. Accordingly, the majority of the Company's revenue is recognized over time, generally ratably over the term of the arrangement due to consistent monthly traffic commitments that expire each period. A small percentage of the Company's services are satisfied at a point in time, such as one-time professional services contracts, integration services and most license sales where the primary obligation is delivery of the license at the start of the term. In these cases, revenue is recognized at a point in time of delivery or satisfaction of the performance obligation.

During the nine months ended September 30, 2018 and 2017, the Company recognized $64.3 million and $43.9 million of revenue that was included in deferred revenue as of December 31, 2017 and 2016, respectively.

As of September 30, 2018, the aggregate amount of remaining performance obligations from contracts with customers was $2.3 billion. The Company expects to recognize more than 70% of its remaining performance obligations as revenue over the next 12 months, with the remaining recognized thereafter. Remaining performance obligations represent the amount of the transaction price under contracts with customers that are attributable to performance obligations that are unsatisfied or partially satisfied at the reporting date. This consists of future committed revenue for monthly, quarterly or annual periods within current contracts with customers, as well as deferred revenue arising from consideration invoiced in prior periods for which the related performance obligations have not been satisfied. It excludes estimates of variable consideration such as usage-based contracts with no committed contract as well as anticipated renewed contracts.