Revenue from Contracts with Customers

12 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

3. Revenue from Contracts with Customers

Receivables, Contract Assets, and Contract Liabilities

(in thousands)	September 30,
	2023		2022
Short-term and long-term receivables	$	997,490	$	870,962
Contract asset	$	16,465	$	21,096
Deferred revenue	$	681,550	$	520,333

As of September 30, 2023, $16.1 million of our contract assets are expected to be transferred to receivables within the next 12 months and therefore are included in Other current assets. The remainder is included in Other assets and expected to be transferred within the next 24 months. As of September 30, 2022, $16.9 million of our contract asset balance was included in Other current assets with the remainder included in Other assets.

Approximately $14.7 million of the September 30, 2022 contract asset balance was transferred to receivables during the year ended September 30, 2023 as a result of the right to payment becoming unconditional. Additions to contract asset of approximately $10.0 million primarily related to revenue recognized in the period, net of billings. There were no impairments of contract assets in the year ended September 30, 2023.

During the year ended September 30, 2023, we recognized $509.1 million of revenue that was included in deferred revenue as of September 30, 2022. There were additional deferrals of $572.5 million, primarily related to new billings. In addition, the acquisition of ServiceMax added $97.8 million of deferred revenue. For subscription contracts, we generally invoice customers annually.

Costs to Obtain or Fulfill a Contract

We recognize an asset for the incremental costs of obtaining a contract with a customer if the benefit of those costs is expected to be longer than one year. These deferred costs (primarily commissions) are amortized proportionately related to revenue over 5 years, which is generally longer than the term of the initial contract because of anticipated renewals as commissions for renewals are not commensurate with commissions related to our initial contracts. As of September 30, 2023 and September 30, 2022, deferred costs of $41.8 million and $40.7 million, respectively, were included in Other current assets and $78.7 million and $77.0 million, respectively, were included in Other assets. Amortization expense related to costs to obtain a contract with a customer was $53.4 million and $50.9 million in the years ended September 30, 2023 and 2022, respectively. There were no substantial impairments of the contract cost asset in the years ended September 30, 2023 and 2022.

Remaining Performance Obligations

Our contracts with customers include transaction price amounts allocated to performance obligations that will be satisfied and recognized as revenue at a later date. As of September 30, 2023, the transaction price amounts include additional performance obligations of $681.6 million recorded in deferred revenue and $1,369.4 million that are not yet recorded in the Consolidated Balance Sheets. We expect to recognize approximately 59% of the total $2,051.0 million over the next 12 months, with the remaining amount thereafter.

Disaggregation of Revenue

(in thousands)	Year ended September 30,
	2023		2022		2021
Recurring revenue(1)	$	1,907,918	$	1,736,188	$	1,616,328
Perpetual license		38,640		34,065		33,013
Professional services		150,495		163,094		157,818
Total revenue	$	2,097,053	$	1,933,347	$	1,807,159

(1)Recurring revenue is comprised of on-premises subscription, perpetual support, SaaS, and cloud services revenue.

We report revenue by the following two product groups:

(in thousands)	Year ended September 30,
	2023		2022		2021
Product lifecycle management (PLM)		1,330,316		1,137,016		1,012,120
Computer-aided design (CAD)		766,737		796,331		795,039
Total revenue	$	2,097,053	$	1,933,347	$	1,807,159

We license products to customers worldwide. Our sales and marketing operations outside the United States are conducted principally through our international sales subsidiaries throughout Europe and the Asia Pacific region. Our international revenue is presented based on the location of our customer. Revenue for the geographic regions in which we operate is presented below.

(in thousands)	Year ended September 30,
	2023		2022		2021
Americas(1)	$	1,023,273	$	895,095	$	766,021
Europe(2)		753,796		714,216		722,977
Asia Pacific		319,984		324,036		318,161
Total revenue	$	2,097,053	$	1,933,347	$	1,807,159

(1)Includes revenue in the United States totaling $993.8 million, $864.7 million, and $741.3 million for 2023, 2022 and 2021, respectively.

(2)Includes revenue in Germany totaling $292.0 million, $318.5 million, and $290.7 million for 2023, 2022 and 2021, respectively.