XML 21 R9.htm IDEA: XBRL DOCUMENT v3.19.2
Revenues
 6 Months Ended
Jul. 31, 2019
Revenue from Contract with Customer [Abstract]  
Revenues Revenues
Disaggregation of Revenue
Subscription and Support Revenue by the Company's service offerings
Subscription and support revenues consisted of the following (in millions):
 
Three Months Ended July 31,
 
Six Months Ended July 31,
 
2019
 
2018
 
2019
 
2018
Sales Cloud
$
1,130

 
$
1,004

 
$
2,203

 
$
1,969

Service Cloud
1,087

 
892

 
2,107

 
1,740

Salesforce Platform and Other
912

 
712

 
1,754

 
1,287

Marketing and Commerce Cloud
616

 
452

 
1,177

 
874

 
$
3,745

 
$
3,060

 
$
7,241

 
$
5,870

Total Revenue by Geographic Locations
Revenues by geographical region consisted of the following (in millions):
 
Three Months Ended July 31,
 
Six Months Ended July 31,
 
2019
 
2018
 
2019
 
2018
Americas
$
2,816

 
$
2,338

 
$
5,433

 
$
4,439

Europe
786

 
629

 
1,541

 
1,235

Asia Pacific
395

 
314

 
760

 
613

 
$
3,997

 
$
3,281

 
$
7,734

 
$
6,287


Revenues by geography are determined based on the region of the Company's contracting entity, which may be different than the region of the customer. Americas revenue attributed to the United States was approximately 96 percent during the three and six months ended July 31, 2019 and 2018. No other country represented more than ten percent of total revenue during the three and six months ended July 31, 2019 and 2018, respectively.
Contract Balances
Contract Asset
As described in Note 1, subscription and support revenue is generally recognized ratably over the contract term beginning on the commencement date of each contract. License revenue is recognized as the licenses are delivered. The Company records a contract asset when revenue recognized on a contract exceeds the billings. The Company's standard billing terms are annual in advance. Contract assets were $268 million as of July 31, 2019 as compared to $215 million as of January 31, 2019 which is included in prepaid expenses and other current assets on the condensed consolidated balance sheet. Impairments of contract assets were immaterial during the three and six months ended July 31, 2019 and 2018, respectively.
Unearned Revenue
Unearned revenue represents amounts that have been invoiced in advance of revenue recognition and is recognized as revenue when transfer of control to customers has occurred or services have been provided. The unearned revenue balance does not represent the total contract value of annual or multi-year, non-cancelable subscription agreements. The Company records unearned revenue when the billings on a contract exceed the revenue recognized. The Company generally invoices customers in annual installments. The unearned revenue balance is influenced by several factors, including seasonality, the compounding effects of renewals, invoice duration, invoice timing, dollar size and new business linearity within the quarter.
The change in unearned revenue was as follows (in millions):
 
Three Months Ended July 31,
 
Six Months Ended July 31,
 
2019
 
2018
 
2019
 
2018
Unearned revenue, beginning of period
$
7,585

 
$
6,201

 
$
8,564

 
$
6,995

Billings and other*
3,396

 
2,875

 
6,110

 
5,086

Contribution from contract asset
7

 
31

 
51

 
25

Revenue recognized ratably over time
(3,736
)
 
(3,056
)
 
(7,223
)
 
(5,924
)
Revenue recognized over time as delivered
(174
)
 
(162
)
 
(346
)
 
(299
)
Revenue recognized at a point in time
(87
)
 
(63
)
 
(165
)
 
(64
)
Unearned revenue from business combinations
151

 
57

 
151

 
64

Unearned revenue, end of period
$
7,142

 
$
5,883

 
$
7,142

 
$
5,883

*Other includes, for example, the impact of foreign currency translation
Revenue recognized ratably over time is generally billed in advance and includes Cloud Services, the related support and advisory services. The majority of revenue recognized for these services is from the beginning of period unearned revenue balance.
Revenue recognized over time as delivered includes professional services billed on a time and materials basis, fixed fee professional services and training classes that are primarily billed, delivered and recognized within the same reporting period. The majority of revenue recognized is billed and recognized in the current period.
Revenue recognized at a point in time substantially includes the portion of software subscriptions allocated to the on-premise software element, which either resulted in smaller unearned revenue or a contract asset.
Remaining Performance Obligation
Transaction price allocated to the remaining performance obligation, referred to by the Company as remaining performance obligation, represents contracted revenue that has not yet been recognized, which includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods. Transaction price allocated to the remaining performance obligation is influenced by several factors, including seasonality, the timing of renewals, the timing of delivery of software licenses, average contract terms and foreign currency exchange rates. Unbilled portions of the remaining performance obligation denominated in foreign currencies are revalued each period based on the period end exchange rates. Unbilled portions of the remaining performance obligation are subject to future economic risks including bankruptcies, regulatory changes and other market factors.
The Company excludes amounts related to performance obligation that are billed and recognized as they are delivered. This primarily consists of professional services contracts that are on a time-and-materials basis.
The majority of the Company's noncurrent remaining performance obligation is expected to be recognized in the next 13 to 36 months.
Remaining performance obligation consisted of the following (in billions):
 
Current
 
Noncurrent
 
Total
As of July 31, 2019
$
12.1

 
$
13.2

 
$
25.3

As of January 31, 2019
$
11.9

 
$
13.8

 
$
25.7