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Revenue from Contracts with Customers
3 Months Ended
Mar. 31, 2019
Revenue From Contract With Customer [Abstract]  
Revenue from Contracts with Customers

2.

Revenue from Contracts with Customers

 

The Company generates all of its revenue from contracts with customers. Many of the Company’s contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices of software licenses are typically estimated using the residual approach. Standalone selling prices of services are typically estimated based on observable transactions when these services are sold on a standalone basis. The Company usually expects payment within 30 to 90 days from the invoice date (fulfillment of performance obligations or per contract terms). None of the Company’s contracts as of March 31, 2019 contained a significant financing component. Differences between the amount of revenue recognized and the amount invoiced, collected from, or paid to its customers are recognized as deferred revenue.

 

Disaggregation of revenue

 

The following table provides information about disaggregated revenue for the three months ended March 31, 2019 and 2018 by the timing of revenue recognition, and includes a reconciliation of the disaggregated revenue by reportable segment (in thousands):

 

 

 

Three Months Ended

 

 

 

 

March 31,

 

 

 

 

2019

 

 

2018

 

 

Revenue

 

 

 

 

 

 

 

 

 

Software & Services

 

 

 

 

 

 

 

 

 

Products and services transferred over time

 

$

8,875

 

 

$

8,786

 

 

Products transferred at a point in time

 

 

2,283

 

 

 

1,899

 

 

Total Software & Services

 

$

11,158

 

 

$

10,685

 

 

Portal & Advertising

 

 

 

 

 

 

 

 

 

Products and services transferred over time

 

$

1,506

 

 

$

2,087

 

 

Products transferred at a point in time

 

 

19,160

 

 

 

20,143

 

 

Total Portal & Advertising

 

$

20,666

 

 

$

22,230

 

 

Total Revenue

 

$

31,824

 

 

$

32,915

 

 

 

Revenue disaggregated by geography, based on the billing address of our customer, consists of the following (in thousands):

 

 

 

Three Months Ended

 

 

 

 

March 31,

 

 

 

 

2019

 

 

2018

 

 

Revenue

 

 

 

 

 

 

 

 

 

United States

 

$

26,274

 

 

$

27,038

 

 

International

 

 

5,550

 

 

 

5,877

 

 

Total revenue

 

$

31,824

 

 

$

32,915

 

 

Remaining Performance Obligations

Deferred revenue is recorded when cash payments are received or due in advance of revenue recognition from software licenses, professional services, and maintenance agreements. The timing of revenue recognition may differ from the timing of billings to customers. The changes in deferred revenue, inclusive of both current and long-term, are as follows (in thousands):

 

(in thousands)

 

 

 

 

Beginning balance - January 1, 2019

 

$

8,886

 

Recognition of deferred revenue

 

 

(3,319

)

Deferral of revenue

 

 

2,935

 

Effect of foreign currency translation

 

 

(300

)

Ending balance - March 31, 2019

 

$

8,202

 

 

The majority of the deferred revenue balance above relates to the maintenance and support contracts for Email software licenses. These are recognized straight-line over the life of the contract, with the majority of the balance being recognized within the next twelve months.  

Practical Expedients

The Company generally expenses sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses.

The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which revenue is recognized at the amount to which the Company has the right to invoice for services performed.