Deferred Revenue and Performance Obligations

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Deferred Revenue and Performance Obligations

Costs to Obtain Customer ContractsThe balance of deferred costs to obtain customer contracts was $162 million and $145 million as of September 30, 2022 and December 31, 2021, respectively. Amortization expense for deferred costs was $23 million and $18 million for the three months ended September 30, 2022 and 2021, respectively, and $65 million and $49 million for the nine months ended September 30, 2022 and 2021, respectively. There were no impairment losses related to deferred costs for the periods presented.Deferred Revenue and Performance Obligations

The changes in the balances of deferred revenue are as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Balance, beginning of period	$	570,199	$	442,463	$	517,210	$	383,358
Billings	385,109		352,580		1,233,633		1,027,949
Subscription and services revenue	(389,628)		(327,812)		(1,136,254)		(912,665)
Other revenue*	(27,233)		(19,162)		(76,142)		(50,573)
Balance, end of period	$	538,447	$	448,069	$	538,447	$	448,069

*Other revenue primarily includes implementation and training services, usage-based revenue, and amounts from contract assets.

For the three months ended September 30, 2022 and September 30, 2021, the majority of revenue recognized was from the deferred revenue balances at the beginning of each period. For the nine months ended September 30, 2022 and 2021, less than half of revenue recognized was from the deferred revenue balances at the beginning of each period. When revenue is recognized in advance of invoicing we record contract assets, which are included in prepaid expenses and other current assets on our consolidated balance sheets. As of September 30, 2022 and December 31, 2021, the balance of contract assets was $3 million and $4 million, respectively.

The aggregate balance of remaining performance obligations as of September 30, 2022 was $1,405 million. We expect to recognize $963 million of the balance as revenue in the next 12 months and the substantial majority of the remainder in the next 13-36 months. The aggregate balance of remaining performance obligations represents contracted revenue that has not yet been recognized, including contracted revenue from renewals, and does not include contract amounts which are cancellable by the customer and amounts associated with optional renewal periods.