Revenue Recognition

12 Months Ended

Jul. 31, 2024

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

Disaggregation of Revenue

Subscription and support revenue is recognized over time and accounted for approximately 97% of our revenue for each of fiscal 2024, fiscal 2023 and fiscal 2022, respectively.

The following table summarizes the revenue by region based on the shipping address of customers who have contracted to use our cloud platform:

	Year Ended July 31,
	2024				2023				2022
	Amount		% Revenue		Amount		% Revenue		Amount		% Revenue
	(in thousands, except for percentage data)
United States	$	1,092,304	50	%	$	808,527	50	%	$	536,924	49	%
Europe, Middle East and Africa	672,421		31		515,136		32		370,035		34
Asia Pacific	327,816		15		241,250		15		155,460		14
Other	75,230		4		52,039		3		28,527		3
Total	$	2,167,771	100	%	$	1,616,952	100	%	$	1,090,946	100	%

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The following table summarizes the revenue from contracts by type of customer:

	Year Ended July 31,
	2024				2023				2022
	Amount		% Revenue		Amount		% Revenue		Amount		% Revenue
	(in thousands, except for percentage data)
Channel partners	$	1,967,908	91	%	$	1,488,379	92	%	$	1,016,747	93	%
Direct customers	199,863		9		128,573		8		74,199		7
Total	$	2,167,771	100	%	$	1,616,952	100	%	$	1,090,946	100	%

Significant Customers

No single customer accounted for 10% or more of the total revenue or the total balance of accounts receivable, net in the periods presented.

Contract Balances

Contract liabilities consist of deferred revenue and include payments received in advance of performance under the contract. Such amounts are recognized as revenue over the contractual period. Deferred revenue, including current and noncurrent balances as of July 31, 2024 and July 31, 2023 was $1,895.0 million and $1,439.7 million, respectively. In fiscal 2024, fiscal 2023 and fiscal 2022 we recognized revenue of $1,277.8 million, $919.9 million and $570.3 million, respectively, that was included in the corresponding contract liability balance at the beginning of the related fiscal year.

We receive payments from customers based upon contractual billing schedules and accounts receivable are recorded when the right to consideration becomes unconditional. Payment terms on invoiced amounts are typically 30 days but may be up to 90 days for some of our channel partners. Contract assets include amounts related to our contractual right to consideration for both completed and partially completed performance obligations that may not have been invoiced and such amounts have historically not been material.

Remaining Performance Obligations

The typical subscription and support term is one to three years. Most of our subscription and support contracts are non-cancelable over the contractual term. However, customers typically have the right to terminate their contracts for cause, if we fail to perform. As of July 31, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was $4,417.6 million. We expect to recognize 48% of the transaction price over the next 12 months and 94% of the transaction price over the next three years, with the remainder recognized thereafter.

Costs to Obtain and Fulfill a Contract

We capitalize sales commission and associated payroll taxes paid to sales personnel that are incremental to the acquisition of channel partner and direct customer contracts. These costs are recorded as deferred contract acquisition costs in the consolidated balance sheets. We determine whether costs should be deferred based on our sales compensation plans, if the commissions are in fact incremental and would not have occurred absent the customer contract.

Sales commissions for renewal of a contract are not considered commensurate with the commissions paid for the acquisition of the initial contract given the substantive difference in commission rates in proportion to their respective contract values. Commissions paid upon the initial acquisition of a contract are amortized over an estimated period of benefit of five years while commissions paid for renewal contracts are amortized over the contractual term of the renewals. Amortization of deferred contract acquisition costs is recognized on a straight-line basis commensurate with the pattern of revenue recognition and included in sales and marketing expense in the consolidated statements of operations.

We determine the period of benefit for commissions paid for the acquisition of the initial contract by taking into consideration the expected subscription term and expected renewals of our customer contracts, the duration of our relationships with our customers, customer retention data, our technology development lifecycle and other factors. We periodically review the carrying amount of deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit of these deferred costs. We did not recognize any impairment losses of deferred contract acquisition costs during the periods presented.

The activity of the deferred contract acquisition costs consisted of the following:

	Year Ended July 31,
	2024		2023		2022
	(in thousands)
Beginning balance	$	375,234	$	297,002	$	207,030
Capitalization of contract acquisition costs	200,303		176,950		158,503
Amortization of deferred contract acquisition costs	(130,139)		(98,718)		(68,531)
Ending balance	$	445,398	$	375,234	$	297,002

The outstanding balance of the deferred contract acquisition costs consisted of the following:

	July 31,
	2024		2023
	(in thousands)
Deferred contract acquisition costs, current	$	148,873	$	115,827
Deferred contract acquisition costs, noncurrent	296,525		259,407
Total deferred contract acquisition costs	$	445,398	$	375,234