(15) Revenue Recognition

On January 1, 2018, the Company adopted the new revenue standard and applied it to all contracts using the modified retrospective method. The Company recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of accumulated deficit. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.

The cumulative effect of the changes made to the Company’s consolidated January 1, 2018 balance sheet for the adoption of the new revenue standard was as follows (in thousands):

	Balance at December 31, 2017			Adjustments Due to ASC 606		Balance at January 1, 2018
BALANCE SHEET
ASSETS
Accounts receivable, net	$	31,699		$	100	$	31,799
Deferred Cost		2,429			2,132		4,551
Deferred Cost (non-current)		—			6,965		6,965
LIABILITIES AND STOCKHOLDERS’ EQUITY
Other current liabilities	$	808		$	100	$	908
Deferred revenue		73,072			—		73,072
Accumulated deficit		(109,252	)		9,097		(100,155	)

The impact of the adoption of the new revenue standard on the Company’s consolidated balance sheet and consolidated statement of operations was as follows (in thousands):

	June 30, 2018
	As Reported			Balances Without Adoption of ASC 606			Effect of Change Higher/(Lower)
BALANCE SHEET
ASSETS
Accounts receivable, net	$	33,064		$	32,855		$	209
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deferred revenue (short and long term)		82,463			82,463			—
Other current liabilities		791			582			209
Accumulated deficit		(129,415	)		(138,303	)		8,888

	For the Three Months Ended June 30, 2018
	As Reported			Activity Without Adoption of ASC 606			Effect of Change Higher/(Lower)
STATEMENT OF OPERATIONS
Revenue	$	35,822		$	35,822		$	—
Net loss		(16,918	)		(17,143	)		225

	For the Six Months Ended June 30, 2018
	As Reported			Activity Without Adoption of ASC 606			Effect of Change Higher/(Lower)
STATEMENT OF OPERATIONS
Revenue	$	66,341		$	66,341		$	—
Net loss		(29,260	)		(29,469	)		209

The following table disaggregates the Company’s revenue by geography which provides information as to the major source of revenue (in thousands).

	For the Six Months Ended June 30, 2018
Primary Geographic Markets	Total
United States	$	59,891
International		6,450
Total	$	66,341

The following table presents the Company’s revenues disaggregated by revenue source (in thousands, unaudited).

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017⁽¹⁾		2018		2017⁽¹⁾
Subscription services	$	33,804	$	23,937	$	62,329	$	46,011
Professional services		2,018		1,084		4,012		1,854
Total revenues	$	35,822	$	25,021	$	66,341	$	47,865

⁽¹⁾	As noted above, prior period amounts have not been adjusted under the modified retrospective method.

Contract Assets

The Company does not have material amounts of contract assets since revenue is recognized as control of goods is transferred or as services are performed. There are a small number of professional services that may occur over a period of time, but that period of time is generally very short in duration. Any contract assets that may arise are recorded in other assets in the Company’s consolidated balance sheet. As of June 30, 2018, the Company had $1.2 million in unbilled receivables related to services performed which were not billed.

Contract Liabilities

The Company’s contract liabilities consist of advance payments and deferred revenue. The Company’s contract liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. The Company classifies advance payments and deferred revenue as current or noncurrent based on the timing of when it expects to recognize revenue. Generally, all contract liabilities are expected to be recognized within one year and are included in deferred revenue in the Company’s consolidated balance sheet. The noncurrent portion of deferred revenue is included and separately disclosed in the Company’s consolidated balance sheet.

Deferred Costs

Deferred costs, which primarily consist of deferred sales commissions, were $13.2 million as of June 30, 2018. For the three and six months ended June 30, 2018, amortization expense for the deferred costs was $1.3 million and $2.6 million, respectively and there was no impairment loss in relation to the costs capitalized.

Deferred Revenue

$33.0 million and $60.7 million of subscription services revenue was recognized during the three and six months ended June 30, 2018 and was included in the deferred revenue balances at the beginning of the respective period. Professional services revenue recognized in the same period from deferred revenue balances at the beginning of the respective periods was not material.

As of June 30, 2018, approximately $76.4 million of revenue is expected to be recognized from remaining performance obligations for subscription contracts.

The Company expects to recognize revenue on approximately $73.4 million of these remaining performance obligations over the next 12 months, with the balance recognized thereafter. Revenue from remaining performance obligations for professional services contracts as of June 30, 2018 was not material.