REVENUE

12 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

The Company primarily derives its revenues through the sale or subscription licensing of its platform solutions and services. The following table disaggregates revenue by offering (in thousands):



	Year Ended December 31,
	2019		2018		2017⁽¹⁾
Platform solutions⁽²⁾	$	576,295	$	466,544	$	382,778
Services⁽³⁾	66,115		61,132		66,580
Total revenue	$	642,410	$	527,676	$	449,358

______________________________________


(1)	2017 amounts have not been adjusted under the modified retrospective method.


(2)	Platform solutions include arrangements for technology-based offerings representing subscription-based cloud-based platform offerings and legacy platform solutions that are not cloud-based and not billed under a subscription-based contract structure.


(3)	Services include advisory, implementation, and support services under time and materials, fixed price, or retainer-based contracts.

Performance Obligations

A performance obligation is a contractual promise to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation based on standalone selling price and revenue is recognized when the performance obligations under the terms of a contract are satisfied. The determination of standalone selling price for each performance obligation requires judgment based on the terms of the contract. As the Company’s standard payment terms are less than one year, the Company has elected the practical expedient under ASC 606-10-32-18 to not assess whether a contract has a significant financing component.

The majority of the Company’s platform solutions contracts contain a series of separately identifiable and distinct services that represent performance obligations that are satisfied over time. The Company allocates revenue to platform solutions by determining the standalone selling price of each performance obligation. Revenue is generally recognized on our platform offerings over the contract term. For these contracts, the Company has determined that it will use the practical expedient under ASC 606-10-55-18 to recognize revenue when it has the right to invoice. The Company qualifies for this practical expedient because the right to invoice corresponds directly with the value transferred to the customer.

The Company allocates revenue to its service arrangements for advisory, implementation, and support services based on contractually agreed upon billing rates applied to direct labor hours expended plus the costs of other items used in the performance of the contract. The Company concluded that it will recognize revenue when it has the right to invoice the customer using the allowable practical expedient since the right to invoice the customer corresponds with the performance obligations completed. Revenues under fixed-price and retainer-based contracts are recognized ratably over the contract period or upon contract completion.

Certain of the Company’s arrangements entitle a client to receive a refund if the Company fails to satisfy contractually specified performance obligations. The refund is limited to a portion or all of the consideration paid. In this case, revenue is recognized when performance obligations are satisfied. Historically, the Company has met contractually specified performance obligations.

Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables, and deferred revenue. Invoices to clients are generated in accordance with the terms of the applicable contract, which may not be directly related to the performance of services. Unbilled receivables are invoiced when the achievement of specific events as defined by each contract occurs. The Company had an unbilled receivables balance of $36.0 million and $20.5 million as of December 31, 2019 and December 31, 2018, respectively. The increase in the unbilled receivables balance was primarily due to the timing of new contract signings and timing of billings. Unbilled receivables are classified as accounts receivable on the consolidated balance sheet.

Commissions for contracts with terms greater than one year are expensed over the remaining life of the contracts. Credits provided to customers which are recorded as a reduction to revenue are amortized over the applicable service period. For remaining contracts, the Company has elected to use the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. The Company had a deferred commissions balance of $11.8 million and $5.7 million as of December 31, 2019 and December 31, 2018, respectively. The Company recognized amortization related to deferred commissions of $1.6 million during the year ended December 31, 2019. The Company had a deferred contract asset balance of $5.8 million and $3.2 million as of December 31, 2019 and December 31, 2018, respectively. These deferred contract assets are applied throughout the life of the contract. Short-term and long-term deferred commissions and deferred contract assets are classified as prepaid expenses and other current assets and other assets on the consolidated balance sheet, respectively.

Advanced billings to clients in excess of revenue earned are recorded as deferred revenue until the aforementioned revenue recognition criteria are met. The Company had a deferred revenue balance of $13.7 million and $20.6 million as of December 31, 2019 and December 31, 2018, respectively. Revenue recognized during the year ended December 31, 2019 that was included in the deferred revenue balance at the beginning of the year was $18.8 million.