REVENUE (Notes)

9 Months Ended

Sep. 30, 2021

Revenue from Contract with Customer [Abstract]

REVENUE

REVENUE

Disaggregated Revenue and Geography Information

Through the evaluation of the discrete financial information that is regularly reviewed by the chief operating decision makers (our chief executive officer and chief financial officer), we have determined that we have one reportable segment.

The following table is a summary of our revenues by type for the three and nine months ended September 30, 2021 and 2020 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Products and solutions net revenues	$	36,850	$	35,775	$	107,295	$	98,121
Subscription services	28,008		17,907		74,384		48,292
Maintenance	30,702		30,826		90,997		93,190
Professional services, training and other services	6,080		5,923		18,204		16,562
Total net revenues	$	101,640	$	90,431	$	290,880	$	256,165

The following table sets forth our revenues by geographic region for the three and nine months ended September 30, 2021 and 2020 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Revenues:
United States	$	45,026	$	36,190	$	126,084	$	105,166
Other Americas	5,222		4,505		15,030		15,841
Europe, Middle East and Africa	38,782		37,537		109,400		99,478
Asia-Pacific	12,610		12,199		40,366		35,680
Total net revenues	$	101,640	$	90,431	$	290,880	$	256,165

Contract Asset

Contract asset activity for the nine months ended September 30, 2021 and 2020 was as follows (in thousands):

	September 30, 2021		September 30, 2020
Contract asset at beginning of year	$	18,579	$	19,494
Revenue in excess of billings	43,757		22,045
Customer billings	(39,724)		(26,263)
Contract asset at end of period	$	22,612	$	15,276

Deferred Revenue

Deferred revenue activity for the nine months ended September 30, 2021 and 2020 was as follows (in thousands):

	September 30, 2021		September 30, 2020
Deferred revenue at beginning of period	$	99,258	$	97,901
Billings deferred	56,846		47,723
Recognition of prior deferred revenue	(69,337)		(64,460)
Deferred revenue at end of period	$	86,767	$	81,164

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

	September 30, 2021
Product	$	4,364
Subscription	7,380
Maintenance contracts	66,676
Implied PCS	6,400
Professional services, training and other	1,947
Deferred revenue at September 30, 2021	$	86,767

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 $6.4 million attributable to Implied PCS recorded in deferred revenue as of September 30, 2021. We expect to recognize revenue for these remaining performance obligations of $0.7 million for the remainder of 2021 and $2.2 million, $1.5 million, $1.0 million and $0.6 million for the years ending December 31, 2022, 2023, 2024, and 2025, respectively, and $0.4 million thereafter.

As of September 30, 2021, we had approximately $40.7 million of transaction price allocated to remaining performance obligations for certain enterprise agreements that have not yet been fully invoiced. Approximately $32.0 million of these performance obligations were unbilled as of September 30, 2021. 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 $40.7 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.