Revenue Recognition

12 Months Ended

Jan. 31, 2020

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following table summarizes revenue by region based on the billing address of customers:


		Year Ended January 31,
		2020						2019						2018
		Amount		Percentage of Revenue		Amount		Percentage of Revenue		Amount		Percentage of Revenue

	(in thousands, except percentages)
Americas		$	500,622	81	%	$	270,132	82	%	$	125,428	83	%
APAC		51,152		8		27,720		8		13,652		9
EMEA		70,884		11		32,665		10		12,398		8
Total		$	622,658	100	%	$	330,517	100	%	$	151,478	100	%

Contract Balances

We receive payments from customers based on a billing schedule as established in our customer contracts. Accounts receivable are recorded when we contractually have the right to consideration. In some arrangements, a right to consideration for our performance under the customer contract may occur before invoicing to the customer, resulting in an unbilled accounts

receivable. The amount of unbilled accounts receivable included within accounts receivable, net of allowances in the consolidated balance sheets was $12.5 million and $7.2 million as of January 31, 2020 and 2019, respectively.

Contract liabilities consist of deferred revenue. Revenue is deferred when we have the right to invoice in advance of performance under a customer contract. The current portion of deferred revenue balances is recognized over the next 12 months. The amount of revenue recognized during the fiscal years ended January 31, 2020, 2019, and 2018 that was included in deferred revenue at the beginning of each period was $119.1 million, $50.3 million, and $21.3 million, respectively.

Remaining Performance Obligation

The terms of our subscription agreements are monthly, annual, and multiyear and we may bill for the full term in advance or on an annual or monthly basis, depending on the billing terms with customers. As of January 31, 2020, the aggregate amount of the transaction price allocated to our remaining performance obligations was $604.1 million, which consists of both billed consideration in the amount of $230.5 million and unbilled consideration in the amount of $373.6 million that we expect to recognize as revenue. We expect to recognize 62% of our remaining performance obligations as revenue over the next 12 months and the remainder thereafter.

Cost to Obtain a Contract

We capitalize sales commissions and associated payroll taxes paid to internal sales personnel that are incremental to the acquisition of customer contracts. These costs are recorded as deferred contract acquisition costs on the consolidated balance sheets. We determine whether costs should be deferred based on our sales compensation plans and if the commissions are incremental and would not have occurred absent the customer contract.

Sales commissions paid upon the initial acquisition of a customer contract are amortized over an estimated period of benefit of three years, which is typically greater than the contractual terms of the customer contracts. We do not pay sales commissions upon contract renewal. Amortization is recognized on a straight-line basis commensurate with the pattern of revenue recognition. We determine the period of benefit for commissions paid for the acquisition of the initial customer contract by taking into consideration the initial estimated customer life and the technological life of our video-first communications platform and related significant features. Amortization of deferred contract acquisition costs is included in sales and marketing expense in the consolidated statements of operations.

We periodically review these deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit. There were no impairment losses recorded during the periods presented.

The following table represents a rollforward of deferred contract acquisition costs:


	Year Ended January 31,
	2020		2019

	(in thousands)
Beginning balance	$	55,516	$	30,586
Additions to deferred contract acquisition costs	72,715		45,769
Amortization of deferred contract acquisition costs	(37,101)		(20,839)
Ending balance	$	91,130	$	55,516
Deferred contract acquisition costs, current (to be amortized in next 12 months)	$	44,885	$	26,453
Deferred contract acquisition costs, noncurrent	46,245		29,063
Total deferred contract acquisition costs	$	91,130	$	55,516