Revenue From Contracts with Customers

3 Months Ended

Mar. 31, 2024

Revenue from Contract with Customer [Abstract]

Revenue From Contracts with Customers

2. Revenue From Contracts with Customers

The Company derives revenue from subscription fees and related professional services. The Company sells subscriptions for its cloud-based solutions directly to customers and indirectly through channel partners through arrangements that are non-cancelable and non-refundable. The Company’s subscription arrangements do not provide customers with the right to take possession of the software supporting the solutions and, as a result, are accounted for as service arrangements. The Company records revenue net of sales or value-added taxes.

Disaggregation of Revenue

The following table summarizes revenue by the Company’s service offerings (in thousands):

	Three Months Ended March 31,
	2024		2023
Subscription services	$	162,569	$	134,023
Professional services	2,574		3,669
Total revenue	$	165,143	$	137,692

See Note 11 for revenue by geographic location.

Deferred Revenue and Remaining Performance Obligations

Deferred revenue consists of customer billings in advance of revenue being recognized from the Company’s subscription and professional services arrangements.

Revenue recognized during the three months ended March 31, 2024 and 2023 from amounts included in deferred revenue at the beginning of these periods was $121.9 million and $93.7 million, respectively.

The aggregate balance of remaining performance obligations as of March 31, 2024 was $435.4 million. The Company expects to recognize $324.5 million of the balance as revenue in the next 12 months and the remainder thereafter. The aggregate balance of remaining performance obligations represents contracted revenue that has not yet been recognized, which includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods.

Deferred Contract Acquisition Costs

The change in the balance of deferred contract acquisition costs during the periods presented is as follows (in thousands):

	Three Months Ended March 31,
	2024		2023
Balance at beginning of the period	$	42,672	$	39,675
Add: Contract costs capitalized during the period	7,072		5,568
Less: Amortization of contract costs during the period	(6,652)		(5,617)
Balance at end of the period	$	43,092	$	39,626