Deferred Revenue and Performance Obligations

12 Months Ended

Jan. 31, 2023

Revenue from Contract with Customer [Abstract]

Deferred Revenue and Performance Obligations

Deferred Revenue and Performance Obligations

Deferred Revenue

Deferred revenue, which is a contract liability, consists primarily of payments received and accounts receivable recorded in advance of revenue recognition under the Company’s contracts with customers and is recognized as the revenue recognition criteria are met.

Subscription revenue recognized during fiscal 2023 and 2022 included $952 million and $495 million, respectively, from deferred revenue balances at the beginning of the respective periods. Professional services and other revenue recognized in fiscal 2023 and 2022 from deferred revenue balances at the beginning of the respective periods was $14 million and $7 million, respectively.

Transaction Price Allocated to the Remaining Performance Obligations

Transaction price allocated to the remaining performance obligations represents all future, non-cancelable contracted revenue that has not yet been recognized, inclusive of deferred revenue that has been invoiced and non-cancelable amounts that will be invoiced and recognized as revenue in future periods.

Total remaining non-cancelable performance obligations under subscription contracts with customers was approximately $3,007 million as of January 31, 2023. Of this amount, the Company expects to recognize revenue of approximately $1,684 million, or 56%, over the next 12 months, with the balance to be recognized as revenue thereafter. Remaining performance obligations for professional services and other contracts as of January 31, 2023 were not material.