Revenue Recognition

6 Months Ended

Dec. 31, 2021

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

Remaining Performance Obligations

    The transaction price we allocate to remaining performance obligations that are unsatisfied, or partially unsatisfied, as of December 31, 2021 represents contracted revenue that will be recognized in future periods. Our future performance obligations consist primarily of SaaS / stand-ready performance obligations relating to future periods, contracted but uncompleted professional services obligations and support and maintenance obligations. During the three and six months ended December 31, 2021 and 2020, the amount of revenue recognized from performance obligations satisfied in prior periods was not significant.

The transaction price allocated to unsatisfied performance obligations was $424 million as of December 31, 2021 of which we expect to recognize approximately $165.1 million over the next twelve months and the remainder thereafter. The timing of the amounts we estimate recognizing in revenue is based primarily on the estimated go-live dates of our SaaS arrangements, or the date the customer has been provided access to the solution. These estimated dates can change for a variety of reasons and the timing of our recognition of revenue is affected by these changes. Once the implementation services for our SaaS solutions have concluded, we generally anticipate that the amount of revenue that will be recognized after the next twelve months will be recognized in a relatively consistent amount over the following two to five year periods. We exclude from our measure of remaining performance obligations amounts related to future transactional or usage-based fees for which the value of services transferred to the customer will correspond to the amount we will invoice for those services.

Contract Assets and Liabilities

    The table below presents our contract assets and deferred revenue balances as of December 31, 2021 and June 30, 2021.

	December 31,	June 30,
	2021	2021	$ Change
	(in thousands)
Contract assets	6,410	6,627	(217)
Deferred revenue	86,601	101,238	(14,637)

    Contract assets arise when we recognize revenue in excess of amounts billed to the customer and the right to payment is contingent on conditions other than simply the passage of time, such as the future completion of a related performance obligation. Contract assets are classified in our consolidated balance sheets as other current assets for those contract assets with recognition periods of one year or less and other assets for contract assets with recognition periods greater than one year. We assess outstanding accounts receivable and contract assets for credit loss on an ongoing basis. In estimating credit losses, we pool accounts with similar risk characteristics. Accounts that do not share the same risk characteristics are assessed for credit loss on an individual basis. The allowance for credit losses is based on historical loss data, customer specific information and current market conditions. Historically, our bad debt expense has not been significant.

Deferred revenue consists of billings or customer payments in excess of amounts recognized as revenue. The decrease in deferred revenue at December 31, 2021 as compared to June 30, 2021 reflects our recognition of revenue from maintenance contracts, a significant portion of which are billed on a calendar year basis.

    For the three and six months ended December 31, 2021, we recognized $31 million and $77.6 million, respectively, in revenue from amounts that were included in deferred revenue as of June 30, 2021. For the three and six months ended December 31, 2020, we recognized $28.4 million and $68.6 million, respectively, in revenue from amounts that were included in deferred revenue as of June 30, 2020.