Disaggregation of Revenue

9 Months Ended

Sep. 30, 2018

Revenue from Contract with Customer [Abstract]

Deferred Commissions/Disaggregation of Revenue/Deferred Revenue and Performance Obligations

Deferred Commissions

Sales commissions earned by our sales force are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for initial contracts are deferred and then amortized commensurate with the recognition of associated revenue over a period of benefit that we have determined to be three to seven years. Deferred commissions were $21.4 million and $19.3 million (as adjusted) as of September 30, 2018, and December 31, 2017, respectively. Amortization expense was $3.8 million and $10.9 million for the three and nine months ended September 30, 2018, respectively, and $2.6 million and $7.9 million for the three and nine months ended September 30, 2017 (as adjusted), respectively. There were no indicators of impairment in relation to the costs capitalized for the periods presented. Deferred commissions have been included with prepaid expenses in the accompanying condensed consolidated balance sheets. Amortization expense related to deferred commissions is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of income.

Disaggregation of Revenue

The tables below show disaggregation of revenue into categories that reflect how economic factors affect the nature, amount, timing, and uncertainty of revenue and cash flows.

Timing of Revenue Recognition

Timing of revenue recognition by revenue category during the period is as follows:

For the three months ended September 30, 2018
	Products and services transferred at a point in time		Products and services transferred over time		Total
Revenues
Software licenses and royalties	$	17,373	$	5,071	$	22,444
Subscriptions	—		58,699		58,699
Software services	—		48,199		48,199
Maintenance	—		96,215		96,215
Appraisal services	—		5,544		5,544
Hardware and other	4,966		—		4,966
Total	$	22,339	$	213,728	$	236,067

For the nine months ended September 30, 2018
	Products and services transferred at a point in time		Products and services transferred over time		Total
Revenues
Software licenses and royalties	$	53,697	$	13,923	$	67,620
Subscriptions	—		160,736		160,736
Software services	—		144,812		144,812
Maintenance	—		286,188		286,188
Appraisal services	—		16,470		16,470
Hardware and other	17,475		—		17,475
Total	$	71,172	$	622,129	$	693,301

For the three months ended September 30, 2017
As Adjusted	Products and services transferred at a point in time		Products and services transferred over time		Total
Revenues
Software licenses and royalties	$	18,007	$	4,755	$	22,762
Subscriptions	—		44,352		44,352
Software services	—		46,045		46,045
Maintenance	—		91,847		91,847
Appraisal services	—		6,290		6,290
Hardware and other	3,410		—		3,410
Total	$	21,417	$	193,289	$	214,706

For the nine months ended September 30, 2017
As Adjusted	Products and services transferred at a point in time		Products and services transferred over time		Total
Revenues
Software licenses and royalties	$	51,257	$	12,569	$	63,826
Subscriptions	—		124,731		124,731
Software services	—		134,401		134,401
Maintenance	—		266,965		266,965
Appraisal services	—		19,268		19,268
Hardware and other	14,007		—		14,007
Total	$	65,264	$	557,934	$	623,198

Recurring Revenue

The majority of our revenue is comprised of recurring revenues from maintenance and subscriptions. Virtually all of our on-premises software clients contract with us for maintenance and support, which provides us with a significant source of recurring revenue. We generally provide maintenance and support for our on-premises clients under annual, or in some cases, multi-year contracts. The contract terms for subscription arrangements range from one to 10 years but are typically contracted for initial periods of three to five years, providing a significant source of recurring revenues on an annual basis. Non-recurring revenues are derived for all other revenue categories.

Recurring revenues and non-recurring revenues recognized during the period are as follows:

For the three months ended September 30, 2018
	Enterprise Software		Appraisal and Tax		Corporate			Totals
Recurring revenues	$	146,292	$	8,622	$	—		$	154,914
Non-recurring revenues	66,183		15,003		(33		)	81,153
Intercompany	3,373		—		(3,373		)	—
Total revenues	$	215,848	$	23,625	$	(3,406	)	$	236,067

For the nine months ended September 30, 2018
	Enterprise Software		Appraisal and Tax		Corporate			Totals
Recurring revenues	$	421,222	$	25,702	$	—		$	446,924
Non-recurring revenues	199,677		41,783		4,917			246,377
Intercompany	9,696		—		(9,696		)	—
Total revenues	$	630,595	$	67,485	$	(4,779	)	$	693,301

For the three months ended September 30, 2017
As Adjusted	Enterprise Software		Appraisal and Tax		Corporate			Totals
Recurring revenues	$	128,476	$	7,723	$	—		$	136,199
Non-recurring revenues	65,416		13,093		(2		)	78,507
Intercompany	2,660		—		(2,660		)	—
Total revenues	$	196,552	$	20,816	$	(2,662	)	$	214,706

For the nine months ended September 30, 2017
As Adjusted	Enterprise Software		Appraisal and Tax		Corporate			Totals
Recurring revenues	$	370,490	$	21,206	$	—		$	391,696
Non-recurring revenues	188,380		38,500		4,622			231,502
Intercompany	7,309		—		(7,309		)	—
Total revenues	$	566,179	$	59,706	$	(2,687	)	$	623,198

Deferred Revenue and Performance Obligations

Total deferred revenue, including long-term, by segment is as follows:

	September 30, 2018		December 31, 2017
			As Adjusted
Enterprise Software	$	307,872	$	277,198
Appraisal and Tax	16,450		20,387
Corporate	2,592		2,302
Totals	$	326,914	$	299,887

The opening balance of total deferred revenue, including long-term, was $290.1 million (as adjusted) as of January 1, 2017.

Changes in total deferred revenue, including long-term, were as follows:

	September 30, 2018
Balance, beginning of period December 31, 2017 (As Adjusted)	$	299,887
Deferral of revenue	649,152
Recognition of deferred revenue	(622,125		)
Balance, end of period	$	326,914

Transaction Price Allocated to the Remaining Performance Obligations

The aggregate amount of transaction price allocated to the remaining performance obligations represents contracted revenue that has not yet been recognized ("Backlog"), which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Backlog as of September 30, 2018 was $1.2 billion, of which we expect to recognize approximately 51% as revenue over the next 12 months and the remainder thereafter.