Revenue

12 Months Ended

Dec. 31, 2024

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

Contract Balances

The following table summarizes the opening and closing balances of our accounts receivable, net; contract assets, current; contract assets, non-current; deferred revenue, current; and deferred revenue, non-current (in millions):

	Accounts receivable, net (1)		Contract assets, current		Contract assets, non-current		Deferred revenue, current		Deferred revenue, non-current
Beginning balances as of January 1, 2024	$	1,004	$	52	$	86	$	125	$	154
Closing balances as of December 31, 2024	949		102		113		123		150
Increase (Decrease)	$	(55)	$	50	$	27	$	(2)	$	(4)
Beginning balances as of January 1, 2023	$	855	$	28	$	55	$	132	$	155
Closing balances as of December 31, 2023	1,004		52		86		125		154
Increase (Decrease)	$	149	$	24	$	31	$	(7)	$	(1)

(1)    The net change in our allowance for credit losses was insignificant during the year ended December 31, 2024.

The difference between the opening and closing balances of our accounts receivable, net, contract assets and deferred revenues primarily results from revenue growth and the timing difference between the satisfaction of our performance obligation and the customer's payment during the years ended December 31, 2024 and 2023. The amounts of revenue recognized during the years ended December 31, 2024, 2023 and 2022 from the opening deferred revenue balance were $88 million, $95 million and $83 million, respectively. For the years ended December 31, 2024, 2023 and 2022, no impairment loss related to contract balances was recognized in the consolidated statement of operations.

Contract Costs

The ending balances of net capitalized contract costs as of December 31, 2024 and 2023 were $436 million and $423 million, respectively, which were included in other assets in the consolidated balance sheet. $122 million, $103

million, and $96 million of contract costs were amortized during years ended December 31, 2024, 2023 and 2022, respectively, which were included in sales and marketing expense in the consolidated statement of operations.

Remaining Performance Obligations

As of December 31, 2024, approximately $11.0 billion of total revenues, including deferred installation revenues, are expected to be recognized in future periods. Most of our revenue contracts have an initial term varying from one to five years, and thereafter, automatically renew in one-year increments. Included in the remaining performance obligations are contracts that are either under the initial term or under one-year renewal periods. We expect to recognize approximately 70% of our remaining performance obligations as revenues over the next two years, with more revenues expected to be recognized in the first year due to the impact of contract renewals. The remainder of the balance is generally expected to be recognized over the next three to five years. We estimate our remaining performance obligations at a point in time. Actual amounts and timing of revenue recognition may differ from these estimates due to changes in actual deployments dates, contract modifications, renewals and/or terminations.

The remaining performance obligations do not include variable consideration related to unsatisfied performance obligations such as the usage of metered power, service fees from xScale data centers that are based on future events or actual costs incurred in the future, or any contracts that could be terminated without any significant penalties including the majority of interconnection revenues. The remaining performance obligations above include revenues to be recognized in the future related to arrangements where we are considered the lessor.