(15) Revenue Recognition

On January 1, 2018, the Company adopted the new revenue standard and applied it to all contracts using the modified retrospective method. The Company recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of accumulated deficit. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.

The cumulative effect of the changes made to the Company’s consolidated January 1, 2018 balance sheet for the adoption of the new revenue standard was as follows (in thousands):

	Balance at December 31, 2017			Adjustments Due to ASC 606		Balance at January 1, 2018
BALANCE SHEET
ASSETS
Accounts receivable, net	$	31,699		$	100	$	31,799
Deferred cost		2,429			2,132		4,561
Deferred cost (non-current)		—			6,965		6,965
LIABILITIES AND STOCKHOLDERS’ EQUITY
Other current liabilities	$	808		$	100	$	908
Deferred revenue		73,072			—		73,072
Accumulated deficit		(109,252	)		9,097		(100,155	)

The impact of the adoption of the new revenue standard on the Company’s consolidated balance sheet and consolidated statement of operations was as follows (in thousands):

	September 30, 2018
	As Reported			Balances Without Adoption of ASC 606			Effect of Change Higher/(Lower)
BALANCE SHEET
ASSETS
Accounts receivable, net	$	37,033		$	36,893		$	140
Deferred cost		5,842			4,361			1,481
Deferred cost (non-current)		8,747			—			8,747
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deferred revenue (current and non-current)		88,639			88,639			—
Other current liabilities		1,242			1,102			140
Accumulated deficit		(137,865	)		(148,093	)		10,228

	For the Three Months Ended September 30, 2018
	As Reported			Activity Without Adoption of ASC 606			Effect of Change Higher/(Lower)
STATEMENT OF OPERATIONS
Revenue	$	38,925		$	38,925		$	—
Net loss		(8,450	)		(8,885	)		435

	For the Nine Months Ended September 30, 2018
	As Reported			Activity Without Adoption of ASC 606			Effect of Change Higher/(Lower)
STATEMENT OF OPERATIONS
Revenue	$	105,266		$	105,266		$	—
Net loss		(37,710	)		(38,390	)		680

The following table disaggregates the Company’s revenue by geography which provides information as to the major source of revenue (in thousands).

Primary Geographic Markets	For the Nine Months Ended September 30, 2018
United States	$	90,866
International		14,400
Total	$	105,266

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017⁽¹⁾		2018		2017⁽¹⁾
Subscription services	$	35,998	$	26,247	$	98,327	$	72,258
Professional services		2,927		1,065		6,939		2,919
Total revenues	$	38,925	$	27,312	$	105,266	$	75,177

⁽¹⁾	As noted above, prior period amounts have not been adjusted under the modified retrospective method.

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 consolidated balance sheet. As of September 30, 2018, the Company had $1.8 million in unbilled receivables related to services performed which were not billed.

Contract Liabilities

The Company’s contract liabilities consist of deferred revenue. There are no other material contract liabilities. The Company classifies deferred revenue as current or noncurrent on the consolidated balance sheet on the timing of when it expects to recognize revenue.

Deferred Costs

Deferred costs, which primarily consist of deferred sales commissions on initial contracts sold, were $14.6 million as of September 30, 2018. For the three and nine months ended September 30, 2018, amortization expense for the deferred costs was $1.4 million and $3.9 million, respectively and there was no impairment loss in relation to the costs capitalized. For the three and nine months ended September 30, 2017, amortization expense for the deferred costs based on our policy under Topic 605, was $1.4 million and $4.1 million, respectively.

Deferred Revenue

$29.9 million and $52.7 million of subscription services revenue was recognized during the three and nine months ended September 30, 2018 and was included in the deferred revenue balances at the beginning of the respective period. Professional services revenue recognized in the same period from deferred revenue balances at the beginning of the respective periods was not material.

As of September 30, 2018, approximately $171.1 million of revenue is expected to be recognized from remaining performance obligations.

The Company expects to recognize revenue on approximately $123.7 million of these remaining performance obligations over the next 12 months, with the balance recognized thereafter.