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Incremental Costs to Obtain a Contract with a Customer
9 Months Ended
Sep. 30, 2023
Revenue from Contract with Customer [Abstract]  
Incremental Costs to Obtain a Contract with a Customer Incremental Costs to Obtain a Contract with a Customer
Deferred costs associated with obtaining customer contracts, specifically commission and incentive payments, as of September 30, 2023 and December 31, 2022 were as follows (in thousands):

September 30,
2023
December 31,
2022
Deferred costs included in prepaid expenses and other current assets$39,139 $37,316 
Deferred costs included in other assets34,857 29,069 
Total deferred costs$73,996 $66,385 
Information related to incremental costs to obtain a contract with a customer for the three and nine months ended September 30, 2023 and 2022 were as follows (in thousands):

 For the Three Months
Ended September 30,
For the Nine Months
Ended September 30,
2023202220232022
Amortization expense related to deferred costs
$12,840 $12,498 $37,225 $40,670 
Incremental costs capitalized
15,650 9,733 45,448 30,486 

Amortization expense related to deferred costs is primarily included in sales and marketing expense in the interim condensed 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. Revenue by geography included in the Company’s interim condensed consolidated statements of income for the three and nine months ended September 30, 2023 and 2022 was as follows (in thousands):

For the Three Months
Ended September 30,
For the Nine Months
Ended September 30,
2023202220232022
U.S.$498,536 $461,087 $1,452,431 $1,419,248 
International466,948 420,809 1,364,472 1,269,627 
Total revenue$965,484 $881,896 $2,816,903 $2,688,875 

The Company reports its revenue in three solution categories: security, delivery and compute. Security includes solutions that are designed to protect business online by keeping infrastructure, websites, applications and users safe. Delivery includes solutions that are designed to enable business online, including media delivery and web performance. Compute includes cloud computing, edge applications, cloud optimization and storage. Revenue by solution category included in the Company’s interim condensed consolidated statements of income for the three and nine months ended September 30, 2023 and 2022 was as follows (in thousands):

For the Three Months
Ended September 30,
For the Nine Months
Ended September 30,
2023202220232022
Security$455,792 $379,509 $1,294,290 $1,141,740 
Delivery379,304 393,248 1,153,386 1,254,074 
Compute130,388 109,139 369,227 293,061 
Total revenue$965,484 $881,896 $2,816,903 $2,688,875 

Most security, delivery and compute 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 usage commitments that expire each period. Any usage over a given commitment is recognized in the period in which the units are served. A small percentage of the Company's contracts 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, 2023 and 2022, the Company recognized $98.2 million and $95.9 million of revenue that was included in deferred revenue as of December 31, 2022 and 2021, respectively.

As of September 30, 2023, the aggregate amount of remaining performance obligations from contracts with customers was $3.2 billion. The Company expects to recognize approximately 65% of its remaining performance obligations as revenue over the next 12 months. The majority of the remaining balance is expected to be recognized over the next two to three years. 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. Revenue recognized during the nine months ended September 30, 2023 and 2022, related to performance obligations satisfied in previous periods was not material.