Deferred Revenue and Performance Obligations

3 Months Ended

Apr. 30, 2020

Revenue Recognition and Deferred Revenue [Abstract]

Deferred Revenue and Performance Obligations

Deferred Revenue and Performance Obligations

Of the beginning deferred revenue balance for the respective periods, we recognized $192 million and $146 million of subscription services revenue during the three months ended April 30, 2020 and 2019, respectively. Professional services revenue recognized in the same periods from deferred revenue balances at the beginning of the respective periods was immaterial.

Transaction Price Allocated to the Remaining Performance Obligations

Transaction price allocated to the remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and non-cancelable amounts that will be invoiced and recognized as revenues in future periods. We applied the practical expedient in accordance with ASU 2014-09, “Revenue from Contracts with Customers” (Topic 606) to exclude the amounts related to professional services contracts as these contracts generally have a remaining duration of one year or less. Revenue from remaining performance obligations for professional services contracts as of April 30, 2020 was immaterial.

As of April 30, 2020, approximately $913 million of revenue is expected to be recognized from remaining performance obligations for subscription services contracts. We expect to recognize revenue on approximately 79% of these remaining performance obligations over the next 12 months, with the balance recognized thereafter.