Revenue and Deferred Revenue

6 Months Ended

Jul. 31, 2022

Revenue From Contract With Customer [Abstract]

Revenue and Deferred Revenue

Note 2: Revenue and Deferred Revenue

The Company derives its revenue from two sources:

Subscription and Services Revenue is derived primarily from recurring subscription fees related to service plans such as Ooma Business, Ooma Residential and other communications services. Service plans are generally sold as monthly subscriptions; however, certain plans are also offered as annual and multi-year subscriptions, typically ranging up to three years. Subscription revenue is generally recognized ratably over the contractual service term.

Product and Other Revenue is generated primarily from the sale of on-premise appliances and end-point devices, including shipping and handling fees for direct customers. The Company recognizes product and other revenue from sales to direct end-customers and channel partners at the point-in-time that control transfers, which is typically when it delivers the product.

Revenue disaggregated by revenue source consisted of the following (in thousands):

	Three Months Ended				Six Months Ended
	July 31, 2022			July 31, 2021	July 31, 2022		July 31, 2021
Subscription and services revenue	$	47,995	$	43,537	$	94,718	$	85,502
Product and other revenue		4,658		3,520		8,272		7,127
Total revenue	$	52,653	$	47,057	$	102,990	$	92,629

The Company derived approximately 50% and 48% of its total revenue from Ooma Business and approximately 47% and 50% from Ooma Residential for the three months ended July 31, 2022 and 2021, respectively. The Company derived approximately 50% and 47% of its total revenue from Ooma Business and approximately 47% and 50% from Ooma Residential for the six months ended July 31, 2022 and 2021, respectively. No individual country outside of the United States, and no single customer, represented 10% or more of total revenue for the periods presented.

Customers who represented 10% or more of net accounts receivable were as follows:

	As of
	July 31, 2022	January 31, 2022
Customer A	16%	19%
Customer B	*	11%
* Less than 10% of net accounts receivable for the period indicated.

Deferred Revenue primarily consists of billings or payments received in advance of meeting revenue recognition criteria. Deferred services revenue is recognized on a ratable basis over the term of the contract as the services are provided.

	As of
	July 31, 2022		January 31, 2022
Subscription and services	$	17,671	$	16,614
Product and other		63		59
Total deferred revenue	$	17,734		16,673
Less: current deferred revenue		17,686		16,600
Non-current deferred revenue included in other long-term liabilities	$	48	$	73

During the three and six months ended July 31, 2022, the Company recognized revenue of approximately $3.0 million and $13.0 million, respectively, pertaining to amounts deferred as of January 31, 2022. As of July 31, 2022, deferred revenue was primarily composed of subscription contracts invoiced during the first half of fiscal 2023, as well as amounts recorded during fiscal 2022 for annual contracts.

Remaining Performance Obligations. As of July 31, 2022, contract revenue that had not yet been recognized for open contracts with an original expected length of greater than one year was approximately $10.5 million. The Company expects to recognize revenue on approximately 52% of this amount over the next 12 months, with the balance to be recognized thereafter.