REVENUE Deferred Revenue Disclosure (Notes)

9 Months Ended

Sep. 30, 2019

Deferred Revenue Arrangement [Line Items]

Deferred Revenue Disclosure [Text Block]

Contract Asset

Contract asset activity for the nine months ended September 30, 2019 was as follows (in thousands):

	September 30, 2019
Contract asset at January 1, 2019	$	16,513
Revenue in excess of billings	20,016
Customer billings	(22,111		)
Contract asset at September 30, 2019	$	14,418
Less: long-term portion (recorded in other long-term assets)	—
Contract asset, current portion	$	14,418

Deferred Revenue

Deferred revenue activity for the nine months ended September 30, 2019 was as follows (in thousands):

	September 30, 2019
Deferred revenue at January 1, 2019	$	99,601
Billings deferred	54,882
Recognition of prior deferred revenue	(69,502		)
Deferred revenue at September 30, 2019	$	84,981

A summary of the significant performance obligations included in deferred revenue as of September 30, 2019 is as follows (in thousands):

	September 30, 2019
Product	$	7,363
Subscription	2,071
Support contracts	60,681
Implied PCS	12,816
Professional services, training and other	2,050
Deferred revenue at September 30, 2019	$	84,981

Remaining Performance Obligations

For transaction prices allocated to remaining performance obligations, we apply practical expedients and do not disclose quantitative or qualitative information for remaining performance obligations (i) that have original expected durations of one year or less and (ii) where we recognize revenue equal to what we have the right to invoice and that amount corresponds directly with the value to the customer of our performance to date.

Historically, for many of our products, we had an ongoing practice of making when-and-if-available software updates available to customers free of charge for a period of time after initial sales to customers. The expectation created by this practice of providing free Software Updates represents an implied obligation of a form of post-contract customer support (“Implied PCS”) which represents a performance obligation. While we have ceased providing Implied PCS on new product offerings, we continue to provide Implied PCS for older products that were predominately sold in prior years. Revenue attributable to Implied PCS performance obligations is recognized over time on a ratable basis over the period that Implied PCS is expected to be provided, which is typically six years. We have remaining performance obligations of $12.8 million attributable to Implied PCS recorded in deferred revenue as of September 30, 2019. We expect to recognize revenue for these remaining performance obligations of $1.6 million for the remainder of 2019 and $5.0 million, $3.0 million, $1.7 million and $1.0 million for the years ended December 31, 2020, 2021, 2022, and 2023, respectively.

As of September 30, 2019, we had approximately $51.2 million of transaction price allocated to remaining performance obligations for certain enterprise agreements that have not yet been fully invoiced. Approximately $50.7 million of these performance obligations were unbilled as of September 30, 2019. Remaining performance obligations represent obligations we must deliver for specific products and services in the future where there is not yet an enforceable right to invoice the customer. Our remaining performance obligations do not include contractually committed minimum purchases that are common in our strategic purchase agreements with resellers since our specific obligations to deliver products or services is not yet known, as customers may satisfy such commitments by purchasing an unknown combination of current or future product offerings. While the timing of fulfilling individual performance obligations under the contracts can vary dramatically based on customer requirements, we expect to recognize the $51.2 million in roughly equal installments through 2026.

Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations due to contract breach, contract amendments, and changes in the expected timing of delivery.