Revenue and Cost of Revenue

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

The Company derives its revenues primarily from subscriptions, sale of products, and professional services. Revenues are recognized when control of these products and services are transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products and services.

Disaggregation of revenue

The following table provides information about disaggregated revenue by primary geographical markets:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Primary geographical markets
North America	92	%	94	%	92	%	94	%
Others	8		6		8		6
Total revenues	100	%	100	%	100	%	100	%

The Company derived over 90% of subscription revenues from RingCentral Office product for both of the three and nine months ended September 30, 2020 and 2019.

Deferred revenue

During the three and nine months ended September 30, 2020, the Company recognized revenue of $14.5 million and $102.5 million, respectively, that was included in the corresponding deferred revenue balance at the beginning of the year.

Remaining performance obligations

The typical subscription term ranges from one month to five years. Contracted revenue as of September 30, 2020 that has not yet been recognized was approximately $1.2 billion. This excludes contracts with an original expected length of less than one year. Of these remaining performance obligations, the Company expects to recognize revenue of 54% of this balance over the next 12 months and 46% thereafter.

Other revenues and cost of revenues

Other revenues are primarily comprised of product revenue from the sale of pre-configured phones, professional services, and phone rentals. Product revenues were $11.3 million and $11.5 million for the three months ended September 30, 2020 and 2019, respectively, and $31.5 million and $30.1 million for the nine months ended September 30, 2020 and 2019, respectively. Cost of product revenues were $10.2 million and $10.4 million for the three months ended September 30, 2020 and 2019, respectively, and $29.8 million and $27.4 million for the nine months ended September 30, 2020 and 2019, respectively.