Deferred Revenue, Performance Obligations, and Unbilled Accounts Receivable

9 Months Ended

Oct. 31, 2021

Revenue Recognition and Deferred Revenue [Abstract]

Deferred Revenue, Performance Obligations, and Unbilled Accounts Receivable

Deferred Revenue, Performance Obligations, and Unbilled Accounts Receivable

Of the beginning deferred revenue balance for the respective periods, we recognized $296 million and $535 million of subscription services revenue during the three and nine months ended October 31, 2021, respectively, and $232 million and $409 million for the three and nine months ended October 31, 2020, respectively. Professional services revenue recognized in the same periods from deferred revenue balances at the beginning of the respective periods was immaterial.

Transaction Price Allocated to the Remaining Performance Obligations

Transaction price allocated to the remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and non-cancelable amounts that will be invoiced and recognized as revenues in future periods. We applied the practical expedient in accordance with ASU 2014-09, “Revenue from Contracts with Customers” (Topic 606) to exclude the amounts related to professional services contracts as these contracts generally have a remaining duration of one year or less.

As of October 31, 2021, approximately $1,037 million of revenue is expected to be recognized from remaining performance obligations for subscription services contracts. We expect to recognize revenue on approximately 73% of these remaining performance obligations over the next 12 months, with the balance recognized thereafter.

Unbilled Accounts Receivable

Unbilled accounts receivable consists of (i) a receivable primarily for the revenue recognized for professional services performed but not yet billed, which were $30 million and $20 million as of October 31, 2021 and January 31, 2021, respectively, and (ii) a contract asset primarily for revenue recognized from non-cancelable, multi-year orders in which fees increase annually but for which we are not contractually able to invoice until a future period, which were $38 million and $27 million as of October 31, 2021 and January 31, 2021, respectively.