Revenue

3 Months Ended

Mar. 31, 2022

Revenue From Contract With Customer [Abstract]

Revenue

5.Revenue

See Note 1 for a description of the Company’s revenue recognition accounting policy.

Disaggregation of Revenue

The following table disaggregates revenue generated within the United States (“U.S.”) from revenue generated from customers outside of the U.S. Revenue for transaction tax compliance in the U.S. is further disaggregated based on the solutions or services purchased by customers. Total revenues consisted of the following (in thousands):

	For the Three Months Ended March 31,
	2022		2021
Revenue (U.S.):
Subscription and returns
Tax calculations	$	100,500	$	76,396
Tax returns and compliance management		73,727		52,847
Interest income on funds held for customers		208		141
Total subscription and returns		174,435		129,384
Professional services		16,041		13,288
Total revenue (U.S.)		190,476		142,672
Total revenue (non-U.S.)		14,054		10,929
Total revenue	$	204,530	$	153,601

Disclosures Related to Contracts with Customers

Timing may differ between the satisfaction of performance obligations and the invoicing and collection of amounts related to contracts with customers. Liabilities are recorded for amounts that are collected in advance of the satisfaction of performance obligations. To the extent a contract exists, as defined by ASC 606, these liabilities are classified as current and non-current deferred revenue. To the extent that a contract does not exist, as defined by ASC 606 (e.g., customer agreements with non-standard termination rights), these liabilities are classified as contract liabilities. Contract liabilities are transferred to deferred revenue at the point in time when the criteria that establish the existence of a contract are met.

Contract Liabilities

A summary of the activity impacting the contract liabilities during the three months ended March 31, 2022 and 2021, is presented below (in thousands):

	For the Three Months Ended March 31,
	2022			2021
Contract liabilities:
Balance beginning of period	$	6,918		$	10,134
Contract liabilities transferred to deferred revenue		(6,622	)		(3,866	)
Addition to contract liabilities		601			6,198
Balance end of period	$	897		$	12,466

As of March 31, 2022, contract liabilities are expected to be transferred to deferred revenue within the next 12 months and therefore are included in accrued expenses on the consolidated balance sheets. As of December 31, 2021 the majority of the contract liability balance related to a single marketplace partner. During the first quarter of 2022, the agreement with this partner was amended such that amounts are no longer presented separately as contract liabilities.

Deferred Revenue

A summary of the activity impacting deferred revenue balances during the three months ended March 31, 2022 and 2021, is presented below (in thousands):

	For the Three Months Ended March 31,
	2022			2021
Deferred revenue:
Balance beginning of period	$	282,955		$	209,690
Revenue recognized		(204,530	)		(153,601	)
Additional amounts deferred		225,185			169,442
Balance end of period	$	303,610		$	225,531

As of March 31, 2022, $302.5 million of deferred revenue is expected to be recognized within the next 12 months and is included in current liabilities on the consolidated balance sheets. The remaining amount of deferred revenue is included in noncurrent liabilities and is expected to be recognized within the next 18 months.

Assets Recognized from the Costs to Obtain Contracts with Customers

Assets are recognized for the incremental costs of obtaining a contract with a customer if the benefit of those costs is expected to be longer than one year. These deferred commissions are amortized over an expected period of benefit of generally six years.

A summary of the activity impacting the deferred commissions during the three months ended March 31, 2022, is presented below (in thousands):

	For the Three Months Ended March 31,
	2022			2021
Deferred commissions:
Balance beginning of period	$	68,519		$	50,870
Additional commissions deferred		6,832			5,695
Amortization of deferred commissions		(4,584	)		(3,335	)
Balance end of period	$	70,767		$	53,230

As of March 31, 2022, $17.3 million of deferred commissions are expected to be amortized within the next 12 months and are included in current assets on the consolidated balance sheets. The remaining amount of deferred commissions is included in noncurrent assets. There were no impairments of assets related to deferred commissions during the three months ended March 31, 2022 or 2021. There were no assets recognized related to the costs to fulfill contracts during the three months ended March 31, 2022, or 2021 as these costs were not material.

Remaining Performance Obligations

Contracts with customers include amounts allocated to performance obligations that will be satisfied at a later date. These amounts include deferred revenue that has been invoiced and non-cancellable amounts that will be invoiced and recognized as revenue in future periods. As of March 31, 2022, the remaining performance obligations to which enforceable rights exist are $392.9 million, of which $377.2 million is expected to be recognized as revenue over the next 12 months with the remaining amount thereafter. Of the remaining performance obligations as of March 31, 2022, $89.3 million relates to non-cancellable amounts that have not yet been invoiced, of which $74.7 million is expected to be recognized as revenue over the next 12 months with the remaining amount thereafter.