Revenue Recognition

9 Months Ended

Sep. 30, 2022

Revenue Recognition [Abstract]

Revenue Recognition

3. REVENUE RECOGNITION

Contract Balances—The Company’s contract assets and liabilities were as follows:

	September 30, 2022		December 31, 2021		January 1, 2021
Contract assets:
Billed accounts receivable, net of allowance for doubtful accounts	$	48,944	$	22,286	$	39,976
Unbilled accounts receivable		5,623		12,110		745
Total contract assets	$	54,567	$	34,396	$	40,721
Contract liabilities:
Deferred revenue	$	119,831	$	98,488	$	80,642
Total contract liabilities	$	119,831	$	98,488	$	80,642

Revenue recognized during the nine months ended September 30, 2022 and 2021 that was included in the deferred revenue balances at the beginning of the year was $85,754 and $67,976, respectively.

Remaining Performance Obligations—Remaining performance obligations represent future promises to transfer goods or services under noncancelable contracts for which revenue has not yet been recognized and we do not yet have the right to bill. As of September 30, 2022, the Company had remaining performance obligations of $269,160 and expects to recognize approximately 67% as revenue over the next 12 months and the remainder thereafter.

Costs to Obtain and Fulfill a Contract—During the three months ended September 30, 2022 and 2021, the Company capitalized commissions and related payroll tax expenditures of $4,365 and $3,786, respectively, and amortized $3,304 and $2,169, respectively, to sales and marketing expense. During the nine months ended September 30, 2022 and 2021, the Company capitalized commissions and related payroll tax expenditures of $11,464 and $9,485, respectively, and amortized $9,051 and $5,719 respectively, to sales and marketing expense. As of September 30, 2022 and December 31, 2021, the amount of deferred commissions and related payroll tax expenditures included in deferred costs was $11,934 and $9,761, respectively, and in other assets was $9,057 and $8,817, respectively.

During the three months ended September 30, 2022, the Company recognized an impairment loss of $1,029 for the remaining value of deferred partner fees associated with content from Russian educator partners that the Company does not expect to recover. During the nine months ended September 30, 2022, the Company recognized a total impairment loss of $2,915 related to these assets. The impairment loss was recorded within general and administrative expenses in the unaudited condensed consolidated statements of operations.