Revenue Recognition

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue Recognition

(15) Revenue Recognition

During the second quarter of 2022, the Company updated the following geographic market presentation. Prior period has been recast to conform to the current presentation. North America includes United States and Canada and International aggregates international revenues excluding Canada. The majority of the Company's North America revenue is generated in the United States. The following table disaggregates the Company’s revenue by geography which provides information as to the major source of revenue (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
Primary Geographic Markets	2022		2021		2022		2021
North America	$	81,880	$	73,751	$	233,379	$	201,031
International		29,521		22,995		81,383		64,574
Total	$	111,401	$	96,746	$	314,762	$	265,605

The following table presents the Company’s revenues disaggregated by revenue source (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Subscription services	$	96,790	$	86,664	$	283,203	$	236,748
Professional services		8,006		6,467		20,571		18,866
Software licenses and other		6,605		3,615		10,988		9,991
Total	$	111,401	$	96,746	$	314,762	$	265,605

Contract Assets

The Company does not have material amounts of contract assets since revenue is recognized as control of goods is transferred or as services are performed. There are a small number of professional services that may occur over a period of time, but that period of time is generally very short in duration. Any contract assets that may arise are recorded in other assets in the Company’s condensed consolidated balance sheet net of an allowance for credit losses.

Contract Liabilities

The Company’s contract liabilities consist of advance payments and deferred revenue. The Company’s contract liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. The Company classifies advance payments and deferred revenue as current or noncurrent based on the timing of when it expects to recognize revenue. Generally, all contract liabilities are expected to be recognized within one year and are included in deferred revenue in the Company’s condensed consolidated balance sheet. The noncurrent portion of deferred revenue is included and separately disclosed in the Company’s condensed consolidated balance sheet.

Deferred Costs

Current deferred costs, which primarily consist of deferred sales commissions, were $15.3 million and $15.8 million as of September 30, 2022 and December 31, 2021, respectively. Noncurrent deferred costs, which primarily consist of deferred sales commissions, were $20.3 million and $17.0 million as of September 30, 2022 and December 31, 2021, respectively. During the three months ended September 30, 2022 and 2021, amortization expense for the deferred costs was $5.0 million and $3.2 million, respectively. During the nine months ended September 30, 2022 and 2021, amortization expense for the deferred costs was $13.7 million and $10.4 million, respectively. There was no impairment loss in relation to the costs capitalized for the nine months ended September 30, 2022 and the year ended December 31, 2021, respectively.

Deferred Revenue

During the three months ended September 30, 2022 and 2021, $89.3 million and $78.8 million, respectively, of subscription services, license and other revenue was recognized and was included in the deferred revenue balances at the beginning of the respective period. During the nine months ended September 30, 2022 and 2021, $189.9 million and $138.6 million, respectively, of subscription services, license and other revenue was recognized and was included in the deferred revenue balances at the beginning of the respective period.

During the three months ended September 30, 2022 and 2021, $3.0 million and $3.7 million, respectively, of professional services revenue was recognized and was included in the deferred revenue balances at the beginning of the respective period. During the nine months ended September 30, 2022 and 2021, $7.3 million and $9.1 million, respectively, of professional services revenue was recognized and was included in the deferred revenue balances at the beginning of the respective period.

As of September 30, 2022, approximately $454.5 million of revenue is expected to be recognized from remaining performance obligations for subscription and other contracts. The Company expects to recognize revenue on approximately $283.6 million of these remaining performance obligations over the next 12 months, with the balance recognized thereafter.

As of September 30, 2022, approximately $16.9 million of revenue is expected to be recognized from remaining performance obligations for professional services contracts. The Company expects to recognize revenue on approximately $14.1 million of these remaining performance obligations over the next 12 months, with the balance recognized thereafter.