Revenue from Contracts with Customers

12 Months Ended

Dec. 31, 2022

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

REVENUE FROM CONTRACTS WITH CUSTOMERS

The Company generated 81%, 78% and 78% of its revenue from U.S. domestic sales in 2022, 2021 and 2020, respectively. The remaining 19%, 22%, and 22% of revenue was generated from non-U.S. sales.

In 2022, 2021 and 2020, the Company recognized 58%, 67%, and 73%, respectively, of its revenue over time as control of the services and goods transferred to the customer. The remaining 42%, 33% and 27%, respectively, of revenue was recognized at a point in time, when the customer obtained control of the promised goods.

The determination of the method by which the Company measures its progress towards the satisfaction of its performance obligations requires judgment and is described in the Summary of Significant Accounting Policies (Note 2).

In the second quarter of 2020, GHG received $7.4 million under the CARES Act as a general distribution from the Provider Relief Fund to provide relief for lost revenues and expenses incurred in connection with COVID-19. The healthcare revenues for the year ended December 31, 2020 includes $5.7 million for lost revenues related to COVID-19 (see Note 19).

Contract Assets. As of December 31, 2022, the Company recognized a contract asset of $26.3 million related to a contract at a Kaplan International business, which is included in Deferred Charges and Other Assets. The Company expects to recognize an additional $312.0 million related to the remaining performance obligation in the contract over the next seven years. As of December 31, 2021, the contract asset was $17.7 million.

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 during the year ended December 31, 2022:

	As of December 31
(in thousands)	2022		2021		% Change
Deferred revenue	$	385,507	$	363,065	6

In April 2020, GHG received $31.5 million under the expanded Medicare Accelerated and Advanced Payment Program modified by the CARES Act as a result of COVID-19. The Department of Health and Human Services began to recoup this advance 365 days after the payment was issued. The advance has been recouped in full as of December 31, 2022. For the years ended December 31, 2022 and 2021, GHG recognized $12.6 million and $18.9 million of the balance in revenue for claims submitted for eligible services, respectively.

The majority of the change in the deferred revenue balance is due to increased enrollment in the Kaplan International division as a result of recovery from COVID-19, offset by the advanced Medicare payment. During the year ended December 31, 2022, the Company recognized $308.2 million from the Company’s deferred revenue balance as of December 31, 2021.

Revenue allocated to remaining performance obligations represents deferred revenue amounts that will be recognized as revenue in future periods. As of December 31, 2022, the deferred revenue balance related to certain medical and nursing qualifications with an original contract length greater than twelve months at Kaplan Supplemental Education was $7.2 million. Kaplan Supplemental Education expects to recognize 68% 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 Year		Costs Associated with New Contracts		Less: Costs Amortized During the Year		Other		Balance at End of Year
2022	$	26,081	$	72,606	$	(66,064)	$	(976)	$	31,647
2021	24,363		61,214		(59,116)		(380)		26,081
2020	31,020		51,891		(58,855)		307		24,363

The majority of other activity was related to currency translation adjustments in 2022, 2021, and 2020.