Revenue from Contracts with Customers	12 Months Ended
Dec. 31, 2018
Revenue From Contract With Customer [Abstract]
Revenue from Contracts with Customers	11. Revenue from Contracts with Customers Accounting policies Our Company provides message security solutions as subscription services in which we recognize revenue as our services are rendered. Our customer contracts are typically one to three year contracts billed annually. We exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by our Company from a customer (e.g., sales, use, value added, and some excise taxes). Disaggregation of Revenue In 2018, we recorded revenue for our services in the following core industry verticals: 49% healthcare, 29% financial services, 7% government sector, and 15% as other. The disaggregation of revenue by industry verticals does not include our revenue from Greenview and Erado. We operate as a single operating segment. Revenue generated from our email protection services represented 100% of our revenue in 2018 and 2017. Further, we sell our solutions as a bundle, applying significant judgement to allocate transaction prices of our services based on the standalone selling price of our component services. Contract balances Our contract assets include our accounts receivable, discussed in Footnote 5 above, and the deferred cost associated with commissions earned by our sales team on securing new, add-on, and renewal contract orders. Upon our adoption of ASC 606, we recorded a cumulative effect adjustment, establishing a $6.6 million noncurrent deferred contract asset in recognition of the lengthened amortization period required by the new guidance. The Company simultaneously released the previously existing current deferred commission asset balance of $415 thousand. During the twelve months ended December 31, 2018, we increased our noncurrent deferred contract asset by $4.9 million, resulting from commissions earned by our sales team during the twelve months ended December 31, 2018. We also amortized $2.2 million of deferred cost, as a selling and marketing expense in the related periods. Our deferred cost asset is assessed for impairment on a periodic basis. There were no impairment losses recognized on deferred contract cost assets for the twelve months ended December 31, 2018. Our contract liabilities consist of deferred revenue representing future customer services which have been billed and collected. The $2.7 million increase to our net deferred revenue in the twelve months ended December 31, 2018, is related to the timing of orders and payments as well as growth of revenue. Performance obligations As of December 31, 2018, the aggregate amount of the transaction prices allocated to remaining service performance obligations, which represents the transaction price of firm orders less inception to date revenue, was $73.0 million. We expect to recognize approximately $47.3 million of revenue related to this backlog in 2019, and $25.7 million in periods thereafter. Approximately $45.1 million of our $70.5 million revenue recognized in the twelve months ended December 31, 2018, was included in our performance obligation balance at the beginning of the period.

Revenue from Contracts with Customers

12 Months Ended

Dec. 31, 2018

Revenue From Contract With Customer [Abstract]

11. Revenue from Contracts with Customers

Accounting policies

Our Company provides message security solutions as subscription services in which we recognize revenue as our services are rendered. Our customer contracts are typically one to three year contracts billed annually. We exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by our Company from a customer (e.g., sales, use, value added, and some excise taxes).

Disaggregation of Revenue

In 2018, we recorded revenue for our services in the following core industry verticals: 49% healthcare, 29% financial services, 7% government sector, and 15% as other. The disaggregation of revenue by industry verticals does not include our revenue from Greenview and Erado.

We operate as a single operating segment. Revenue generated from our email protection services represented 100% of our revenue in 2018 and 2017. Further, we sell our solutions as a bundle, applying significant judgement to allocate transaction prices of our services based on the standalone selling price of our component services.

Contract balances

Our contract assets include our accounts receivable, discussed in Footnote 5 above, and the deferred cost associated with commissions earned by our sales team on securing new, add-on, and renewal contract orders. Upon our adoption of ASC 606, we recorded a cumulative effect adjustment, establishing a $6.6 million noncurrent deferred contract asset in recognition of the lengthened amortization period required by the new guidance. The Company simultaneously released the previously existing current deferred commission asset balance of $415 thousand. During the twelve months ended December 31, 2018, we increased our noncurrent deferred contract asset by $4.9 million, resulting from commissions earned by our sales team during the twelve months ended December 31, 2018. We also amortized $2.2 million of deferred cost, as a selling and marketing expense in the related periods. Our deferred cost asset is assessed for impairment on a periodic basis. There were no impairment losses recognized on deferred contract cost assets for the twelve months ended December 31, 2018.

Our contract liabilities consist of deferred revenue representing future customer services which have been billed and collected. The $2.7 million increase to our net deferred revenue in the twelve months ended December 31, 2018, is related to the timing of orders and payments as well as growth of revenue.

Performance obligations

As of December 31, 2018, the aggregate amount of the transaction prices allocated to remaining service performance obligations, which represents the transaction price of firm orders less inception to date revenue, was $73.0 million. We expect to recognize approximately $47.3 million of revenue related to this backlog in 2019, and $25.7 million in periods thereafter. Approximately $45.1 million of our $70.5 million revenue recognized in the twelve months ended December 31, 2018, was included in our performance obligation balance at the beginning of the period.