Revenue from Contracts with Customers

12 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

Revenue from Contracts with Customers

Disaggregation of Revenue

The following table summarizes revenue:

	Year Ended December 31,
(in thousands, except percentages)	2023			2022			2021
Revenue:
Subscription lease licenses	$	786,050		$	687,665		$	617,643
Perpetual licenses	302,698			301,313			328,154
Software licenses	1,088,748			988,978			945,797
Maintenance	1,103,523			1,004,245			896,037
Service	77,678			72,330			64,881
Maintenance and service	1,181,201			1,076,575			960,918
Total revenue	$	2,269,949		$	2,065,553		$	1,906,715
Direct revenue, as a percentage of total revenue	73.9		%	76.1		%	76.3		%
Indirect revenue, as a percentage of total revenue	26.1		%	23.9		%	23.7		%

Our software licenses revenue is recognized up front, while maintenance and service revenue is recognized over the term of the contract.

Deferred Revenue

Deferred revenue consists of billings made or payments received in advance of revenue recognition from customer agreements. The timing of revenue recognition may differ from the timing of billings to customers. Payment terms vary by the type and location of customer and the products or services offered. The time between invoicing and when payment is due is not significant.

The changes in deferred revenue, inclusive of both current and long-term deferred revenue, during the years ended December 31, 2023 and 2022 were as follows:

(in thousands)	2023		2022
Beginning balance – January 1	$	435,758	$	412,781
Acquired deferred revenue	8,030		5,818
Deferral of revenue	2,305,294		2,099,550
Recognition of deferred revenue	(2,269,949)		(2,065,553)
Currency translation	621		(16,838)
Ending balance – December 31	$	479,754	$	435,758

Total revenue allocated to remaining performance obligations as of December 31, 2023 will be recognized as revenue as follows:

(in thousands)
Next 12 months	$	897,393
Months 13-24	371,957
Months 25-36	150,744
Thereafter	52,490
Total revenue allocated to remaining performance obligations	$	1,472,584

Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes both deferred revenue and backlog. Our backlog represents deferred revenue associated with installment billings for periods beyond the current quarterly billing cycle and committed contracts with start dates beyond the end of the current period. Revenue recognized during the years ended December 31, 2023 and 2022 included amounts in deferred revenue and backlog at the beginning of the period of $846.3 million, of which $414.0 million was in deferred revenue, and $764.9 million, of which $391.5 million was in deferred revenue, respectively.