Deferred Commissions

9 Months Ended

Sep. 30, 2021

Revenue from Contract with Customer [Abstract]

Deferred Commissions

Deferred CommissionsSales 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 $36.2 million and $32.3 million as of September 30, 2021, and December 31, 2020, respectively. Amortization expense related to deferred commissions was $3.5 million and $9.6 million for the three and nine months ended September 30, 2021, respectively, and $3.0 million and $8.9 million for the three and nine months ended September 30, 2020, 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 for the current portion and non-current other assets for the long-term portion 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, 2021
	Products and services transferred at a point in time		Products and services transferred over time		Total
Revenues
Software licenses and royalties	$	19,170	$	3,503	$	22,673
Subscriptions	—		252,942		252,942
Software services	—		54,624		54,624
Maintenance	—		117,833		117,833
Appraisal services	—		7,146		7,146
Hardware and other	4,655		—		4,655
Total	$	23,825	$	436,048	$	459,873

For the three months ended September 30, 2020
	Products and services transferred at a point in time		Products and services transferred over time		Total
Revenues
Software licenses and royalties	$	16,777	$	3,160	$	19,937
Subscriptions	—		89,290		89,290
Software services	—		47,946		47,946
Maintenance	—		117,979		117,979
Appraisal services	—		5,394		5,394
Hardware and other	5,200		—		5,200
Total	$	21,977	$	263,769	$	285,746

For the nine months ended September 30, 2021
	Products and services transferred at a point in time		Products and services transferred over time		Total
Revenues
Software licenses and royalties	$	45,983	$	9,227	$	55,210
Subscriptions	—		554,979		554,979
Software services	—		155,601		155,601
Maintenance	—		356,566		356,566
Appraisal services	—		19,876		19,876
Hardware and other	16,518		—		16,518
Total	$	62,501	$	1,096,249	$	1,158,750

For the nine months ended September 30, 2020
	Products and services transferred at a point in time		Products and services transferred over time		Total
Revenues
Software licenses and royalties	$	47,311	$	8,388	$	55,699
Subscriptions	—		256,651		256,651
Software services	—		143,733		143,733
Maintenance	—		349,104		349,104
Appraisal services	—		15,853		15,853
Hardware and other	12,338		—		12,338
Total	$	59,649	$	773,729	$	833,378

Recurring Revenue

The majority of our revenue is comprised of revenues from maintenance and subscriptions, which we consider to be recurring revenue. 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. We consider all other revenue categories to be non-recurring revenues.

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

For the three months ended September 30, 2021
	Enterprise Software		Appraisal and Tax		NIC		Corporate		Totals
Recurring revenues	$	212,517	$	15,709	$	142,549	$	—	$	370,775
Non-recurring revenues	67,780		13,194		8,036		88		89,098
Intercompany	5,123		20		—		(5,143)		—
Total revenues	$	285,420	$	28,923	$	150,585	$	(5,055)	$	459,873

For the three months ended September 30, 2020
	Enterprise Software		Appraisal and Tax		NIC		Corporate		Totals
Recurring revenues	$	191,242	$	16,026	$	—	$	—	$	207,268
Non-recurring revenues	65,569		12,909		—		—		78,478
Intercompany	5,128		38		—		(5,166)		—
Total revenues	$	261,939	$	28,973	$	—	$	(5,166)	$	285,746

For the nine months ended September 30, 2021
	Enterprise Software		Appraisal and Tax		NIC		Corporate		Totals
Recurring revenues	$	625,548	$	50,012	$	235,985	$	—	$	911,545
Non-recurring revenues	190,992		39,507		13,679		3,027		247,205
Intercompany	15,989		51		—		(16,040)		—
Total revenues	$	832,529	$	89,570	$	249,664	$	(13,013)	$	1,158,750

For the nine months ended September 30, 2020
	Enterprise Software		Appraisal and Tax		NIC		Corporate		Totals
Recurring revenues	$	559,191	$	46,564	$	—	$	—	$	605,755
Non-recurring revenues	187,142		40,479		—		2		227,623
Intercompany	13,662		58		—		(13,720)		—
Total revenues	$	759,995	$	87,101	$	—	$	(13,718)	$	833,378

Deferred Revenue and Performance Obligations

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

	September 30, 2021		December 31, 2020
Enterprise Software	$	452,435	$	422,742
Appraisal and Tax	31,300		36,945
NIC	9,525		—
Corporate	2,043		1,691
Totals	$	495,303	$	461,378

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

	Nine months ended September 30, 2021
Balance as of December 31, 2020	$	461,378
Deferral of revenue	868,125
Recognition of deferred revenue	(834,200)
Balance as of September 30, 2021	$	495,303

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, 2021, was $1.77 billion, of which we expect to recognize approximately 47% as revenue over the next 12 months and the remainder thereafter.