Revenue Recognition

3 Months Ended

Mar. 31, 2022

Revenue from Contract with Customer [Abstract]

Revenue Recognition

13. Revenue Recognition

Transaction price allocated to the remaining performance obligations

As of March 31, 2022, approximately $984 million of revenue is expected to be recognized from remaining performance obligations. We expect to recognize revenue on approximately 60% of these remaining performance obligations over the next 12 months, with the remainder recognized thereafter.

We applied the practical expedient in ASC 606-10-50-14 and have excluded the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less (one-time services); and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed (transactional revenue).

Contract balances

Our contract assets as of March 31, 2022 and December 31, 2021 were insignificant. Our opening and closing balances of deferred revenue were as follows:

(in thousands)	March 31, 2022		December 31, 2021
Total deferred revenue	$	355,677	$	378,746

The decrease in deferred revenue during the three months ended March 31, 2022 was primarily due to a seasonal decrease in customer contract renewals. Historically, due to the timing of customer budget cycles, we have an increase in customer contract renewals at or near the beginning of our third quarter. Generally, our lowest balance of deferred revenue during the year is at the end of our first quarter. The amount of revenue recognized during the three months ended March 31, 2022 that was included in the deferred revenue balance at the beginning of the period was approximately $152 million. The amount of revenue recognized during the three months ended March 31, 2022 from performance obligations satisfied in prior periods was insignificant.

Disaggregation of revenue

We sell our cloud solutions and related services in three primary geographical markets: to customers in the United States, to customers in the United Kingdom and to customers located in other countries. The following table presents our revenue by geographic area based on the address of our customers:

	Three months ended March 31,
(dollars in thousands)	2022		2021
United States	$	214,394	$	185,327
United Kingdom	27,660		22,305
Other countries	15,070		11,559
Total revenue	$	257,124	$	219,191

Beginning in the second quarter of 2021, we combined our General Markets Group ("GMG") and Enterprise Markets Group ("EMG") into a single U.S. Markets Group ("UMG") and moved our Corporations vertical under our International Markets Group ("IMG"). This change was made to better align our resources toward customer retention and growth, which are key objectives as we progress toward our long-term aspirational goals.

The UMG, IMG and EVERFI comprised our go-to-market organizations as of March 31, 2022. The following is a description of each market group as of that date:

•The UMG focuses on sales primarily to all prospects and customers inside of the U.S.; and

•The IMG focuses on sales primarily to all prospects and customers outside of the U.S, as well as corporations.

•We acquired EVERFI as of December 31, 2021 as discussed in Note 3 to these condensed consolidated financial statements. As we are working to integrate EVERFI into our business, it has not yet been included in one of our market groups.

The following table presents our revenue by market group:

	Three months ended March 31,
(dollars in thousands)	2022		2021(1)
UMG	$	182,489	$	173,467
IMG	48,054		45,769
EVERFI	26,975		—
Other	(394)		(45)
Total revenue	$	257,124	$	219,191

(1)Due to the market group change discussed above, we have recast our revenue by market group for the three months ended March 31, 2021 to present them on a consistent basis with the current year.

The following table presents our recurring revenue by type:

	Three months ended March 31,
(dollars in thousands)	2022		2021
Contractual recurring	$	174,531	$	146,821
Transactional recurring	70,135		59,929
Total recurring revenue	$	244,666	$	206,750