Revenue from Contracts with Customers

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

REVENUE FROM CONTRACTS WITH CUSTOMERS

The Company generated 79% and 77% of its revenue from U.S. domestic sales for the three and nine months ended September 30, 2019, respectively. The remaining 21% and 23% of revenue was generated from non-U.S. sales for the three and nine months ended September 30, 2019, respectively. For the three and nine months ended September 30, 2018, 78% and 76% of revenue was from U.S. domestic sales, respectively. The remaining 22% and 24% was generated from non-U.S. sales in the three and nine months ended September 30, 2018, respectively.

For the three months ended September 30, 2019, the Company recognized 70% of its revenue over time as control of the services and goods transferred to the customer, and 30% at a point in time, when the customer obtained control of the promised goods. For the nine months ended September 30, 2019, the Company recognized 74% of its revenue over time, and 26% at a point in time. For the three and nine months ended September 30, 2018, the Company recognized 80% of its revenue over time, and the remaining 20% at a point in time.

Deferred Revenue. The Company records deferred revenue when cash payments are received or due in advance of the Company’s performance, including amounts which are refundable. The following table presents the change in the Company’s deferred revenue balance:

	As of
	September 30, 2019		December 31, 2018		%
(in thousands)					Change
Deferred revenue	$	341,682	$	311,214	10

The majority of the change in the deferred revenue balance is related to the cyclical nature of services at the Kaplan international division. During the nine months ended September 30, 2019, the Company recognized $254.4 million related to the Company’s deferred revenue balance as of December 31, 2018.

Revenue allocated to remaining performance obligations represents deferred revenue amounts that will be recognized as revenue in future periods. As of September 30, 2019, KTP’s deferred revenue balance related to certain medical and nursing qualifications with an original contract length greater than twelve months was $8.9 million. KTP expects to recognize 66% of this revenue over the next twelve months and the remainder thereafter.

Costs to Obtain a Contract. The following table presents changes in the Company’s costs to obtain a contract asset:

(in thousands)	Balance at Beginning of Period		Costs associated with new contracts		Less: Costs amortized during the period			Other			Balance at End of Period
2019	$	21,311	$	29,381	$	(34,729	)	$	(312	)	$	15,651

The majority of other activity is related to currency translation adjustments during the nine months ended September 30, 2019. Amortization expense for costs to obtain a contract was $9.2 million for the three months ended September 30, 2019.