Revenue Recognition

9 Months Ended

Sep. 30, 2020

Revenue From Contract With Customer [Abstract]

Revenue Recognition

(15) Revenue Recognition

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	2020		2019		2020		2019
United States	$	52,127	$	41,827	$	150,093	$	112,483
International		19,129		10,720		45,440		31,288
Total	$	71,256	$	52,547	$	195,533	$	143,771

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Subscription services	$	63,627	$	45,616	$	176,944	$	128,422
Professional services		4,543		6,162		13,677		11,728
Software licenses and other		3,086		769		4,912		3,621
Total revenues	$	71,256	$	52,547	$	195,533	$	143,771

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 net of an allowance for credit losses, which is not material.  

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 consolidated balance sheet. The noncurrent portion of deferred revenue is included and separately disclosed in the Company’s consolidated balance sheet.

Deferred Costs

Current deferred costs, which primarily consist of deferred sales commissions, were $11.4 million and $9.9 million as of September 30, 2020 and December 31, 2019, respectively. Noncurrent deferred costs, which primarily consist of deferred sales commissions, were $15.5 million and $14.2 million as of September 30, 2020 and December 31, 2019, respectively. During the three months ended September 30, 2020 and 2019, amortization expense for the deferred costs was $3.5 million and $1.9 million, respectively. During the nine months ended September 30, 2020 and 2019, amortization expense for the deferred costs was $9.2 million and $5.5 million, respectively. There was no impairment loss in relation to the costs capitalized for the nine months ended September 30, 2020 and the year ended December 31, 2019, respectively.

Deferred Revenue

$54.3 million and $36.9 million of subscription services and license revenue was recognized during the three months ended September 30, 2020 and 2019, respectively, and was included in the deferred revenue balances at the beginning of the respective period. $110.7 million and $77.0 million of subscription services and license revenue was recognized during the nine months ended September 30, 2020 and 2019, respectively, and was included in the deferred revenue balances at the beginning of the respective period.

$5.1 million and $4.1 million of professional services revenue was recognized during the three months ended September 30, 2020 and 2019, respectively, and was included in the deferred revenue balances at the beginning of the respective period. $6.0 million and $5.2 million of professional services revenue was recognized during the nine months ended September 30, 2020 and 2019, respectively, and was included in the deferred revenue balances at the beginning of the respective period.

As of September 30, 2020, approximately $322.6 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 $189.0 million of these remaining performance obligations over the next 12 months, with the balance recognized thereafter.      

As of September 30, 2020, approximately $8.7 million of revenue is expected to be recognized from remaining performance obligations for professional services contracts. The Company expects to recognize revenue on approximately $7.3 million of these remaining performance obligations over the next 12 months, with the balance recognized thereafter.