Deferred Revenue and Commissions

6 Months Ended

Aug. 01, 2021

Revenue from Contract with Customer [Abstract]

Deferred Revenue and Commissions

Deferred Revenue and Commissions

Deferred Commissions

Deferred commissions consist of incremental costs paid to our sales force to obtain customer contracts.

Changes in total deferred commissions during the periods presented are as follows (in thousands):

	Second Quarter of Fiscal				First Two Quarters of Fiscal
	2021		2022		2021		2022
Beginning balance	$	142,363	$	185,875	$	139,204	$	187,924
Additions	30,534		42,791		60,296		71,980
Recognition of deferred commissions	(28,210)		(32,701)		(54,813)		(63,939)
Ending balance	$	144,687	$	195,965	$	144,687	$	195,965

Of the $196.0 million total deferred commissions balance at the end of the second quarter of fiscal 2022, we expect to recognize approximately 30% as commission expense over the next 12 months and the remainder thereafter.

There was no impairment related to capitalized commissions for the second quarter and first two quarters of fiscal 2021 and 2022.

Deferred Revenue

Deferred revenue primarily consists of amounts that have been invoiced but have not yet been recognized as revenue including performance obligations pertaining to subscription services.

Changes in total deferred revenue during the periods presented are as follows (in thousands):

	Second Quarter of Fiscal				First Two Quarters of Fiscal
	2021		2022		2021		2022
Beginning balance	$	706,060	$	866,160	$	697,288	$	843,697
Additions	155,435		215,613		287,169		402,464
Recognition of deferred revenue	(136,744)		(171,959)		(259,706)		(336,347)
Ending balance	$	724,751	$	909,814	$	724,751	$	909,814

Revenue recognized during the second quarter of fiscal 2021 and 2022 from deferred revenue at the beginning of each respective period was $119.4 million and $155.3 million. Revenue recognized during the first two quarters of fiscal 2021 and 2022 from deferred revenue at the beginning of each respective period was $204.6 million and $258.6 million.

Remaining Performance Obligations

Total remaining performance obligations (RPO) which is contracted but not recognized revenue was $1,196.0 million at the end of the second quarter of fiscal 2022. RPO consists of both deferred revenue and non-cancelable amounts that are expected to be invoiced and recognized as revenue in future periods. Product orders are generally cancelable until delivery has occurred, and as such unfulfilled product orders are excluded from RPO. Of the $1,196.0 million contracted but not recognized revenue at the end of the second quarter of fiscal 2022, we expect to recognize approximately 45% over the next 12 months, and the remainder thereafter.