Revenue Recognition

12 Months Ended

Dec. 31, 2018

Revenue From Contract With Customer [Abstract]

(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 costs		2,429			2,132		4,561
Deferred costs (non-current)		—			6,965		6,965
LIABILITIES AND STOCKHOLDERS’ EQUITY
Other current liabilities	$	808		$	100	$	908
Deferred revenue (current and non-current)		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):

	December 31, 2018
	As Reported			Balances Without Adoption of ASC 606			Effect of Change Higher/(Lower)
BALANCE SHEET
ASSETS
Accounts receivable, net	$	41,107		$	40,907		$	200
Deferred costs		6,503			4,580			1,923
Deferred costs (non-current)		10,265			—			10,265
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deferred revenue (current and non-current)		95,636			95,636			—
Other current liabilities		1,490			1,290			200
Accumulated deficit		(147,670	)		(159,858	)		12,188

	For the Year Ended December 31, 2018
	As Reported			Activity Without Adoption of ASC 606			Effect of Change Higher/(Lower)
STATEMENT OF OPERATIONS
Revenue	$	147,094		$	147,094		$	—
Net loss		(47,515	)		(50,606	)		3,091

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 Year Ended December 31, 2018
United States	$	119,589
International		27,505
Total	$	147,094

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

	Year Ended
	December 31,
	2018		2017⁽¹⁾
Subscription services	$	137,556	$	100,000
Professional services		9,538		4,352
Total revenues	$	147,094	$	104,352

⁽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 December 31, 2018, the Company had $2.1 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 based 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, was $16.8 million as of December 31, 2018. For the twelve months ended December 31, 2018, amortization expense for the deferred costs was $5.5 million and there was no impairment loss in relation to the costs capitalized. For the twelve months ended December 31, 2017, amortization expense for the deferred costs based on our policy under Topic 605, was $5.9 million and capitalized commissions totaled $2.4 million.

Deferred Revenue

$62.5 million of subscription services revenue was recognized during the twelve months ended December 31, 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 December 31, 2018, approximately $201.7 million of revenue is expected to be recognized from remaining performance obligations.

The Company expects to recognize revenue on approximately $117.2 million of these remaining performance obligations over the next 12 months, with the balance recognized thereafter which is generally two to three years.