Related Party Transactions

3 Months Ended

Jul. 31, 2022

Revenue Transactions with Baker Hughes Company

In June 2019, the Company entered into multiple agreements with Baker Hughes Company (“Baker Hughes”) under which Baker Hughes received a three-year subscription to use the Company’s software. These agreements were revised in June 2020 to extend the term to five years and modify the subscription fees due. Under the agreements as revised in June 2020, Baker Hughes made minimum, non-cancelable revenue commitments, inclusive of their direct subscription fees and third-party revenue generated through a joint marketing arrangement with Baker Hughes, in the amount of $46.7 million in fiscal year 2020, $53.3 million in fiscal year 2021, $75.0 million in fiscal year 2022, $125.0 million in fiscal year 2023, and $150.0 million in fiscal year 2024. The Company also agreed to pay Baker Hughes a sales commission on subscriptions and services offerings it resold in excess of these minimum revenue commitments.

The Company and Baker Hughes further revised these agreements in October 2021 to extend the term by an additional year, for a total of six years, with an expiration date in the fiscal year ending April 30, 2025, to modify the amount of Baker Hughes’ annual commitments to $85.0 million in fiscal year 2023, $110.0 million in fiscal year 2024, and $125.0 million in fiscal year 2025, and to revise the structure of the arrangement to further incentivize Baker Hughes’ sales of the Company’s products and services.

A portion of the transaction price in the Company’s arrangement with Baker Hughes is variable. Beginning in the fiscal year ending April 30, 2023, Baker Hughes’ annual commitments will be reduced by any revenue the Company generates from certain customers. Known and estimable revenue from certain customers related to the arrangement is a form of variable consideration, which was determined at contract inception and reduces the revenue recognized from the arrangement. At the end of each reporting period, the Company reviews and updates the estimate as additional information becomes available.

Pursuant to the revised arrangement, the Company acknowledged that Baker Hughes had met its minimum annual revenue commitment for the fiscal year 2022 and recognized $16.0 million of sales commission as deferred costs during the fiscal quarter ended October 31, 2021 related to this arrangement, which will be amortized over an expected period of five years.

Revenue recognized under the arrangement were as follows (in thousands):


	Three Months Ended July 31,
	2022		2021
Direct subscription	$	16,330	$	10,208
Direct professional services	129		2,075
Total revenue from direct subscription and professional services	16,459		12,283
Total revenue from certain customers in Oil and Gas field related to the Baker Hughes arrangement	7,110		3,867
Total revenue related to the arrangement	$	23,569	$	16,150

As of July 31, 2022 and April 30, 2022, balances related to Baker Hughes that are reported within accounts receivable, net (inclusive of unbilled receivables of $33.1 million and $16.5 million, respectively) included $33.6 million and $35.8 million, respectively, and deferred revenue, current included $0.1 million and $0.1 million, respectively.

The Company recognized cost of subscription revenue related to services purchased from Baker Hughes of nil and $0.1 million during the three months ended July 31, 2022 and 2021, respectively. The Company recognized sales and marketing expenses related to Baker Hughes of $3.5 million and $0.1 million during the three months ended July 31, 2022 and 2021, respectively. As of July 31, 2022 and April 30, 2022, accounts payable included $4.7 million and $18.5 million, respectively.

The remaining performance obligations related to Baker Hughes, which includes both direct subscriptions and reseller arrangements, is comprised of (in thousands):


	As of July 31,
	2022		2021
Deferred revenue	$	2,051	$	25,146
Commitments from non-cancellable contracts	195,949		69,858
Total remaining performance obligations	$	198,000	$	95,004

As of July 31, 2022 and April 30, 2022, the current portion of deferred costs of $4.9 million and $4.9 million, respectively, were included in prepaid expenses and other current assets, and the non-current portion of $14.9 million and $16.1 million, respectively, were included in other assets, non-current. The Company amortized $1.2 million and $0.4 million of deferred commissions during the three months ended July 31, 2022 and 2021, respectively, and this amount was included in sales and marketing expense in the condensed consolidated statements of operations. The Company paid sales commission of $16.0 million and $3.4 million during the three months ended July 31, 2022 and 2021, respectively, related to this arrangement.

As of July 31, 2022 and April 30, 2022, accrued and other current liabilities included $2.4 million and $2.5 million, respectively, and other long-term liabilities included nil and $2.4 million, respectively.