Revenue Recognition

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

Disaggregation of Revenue

The following table presents a summary of revenue:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2020		2019		2020		2019
Subscription revenue	$	96,792	$	75,503	$	275,192	$	209,610
Perpetual license and maintenance revenue	12,448		13,797		38,046		40,877
Professional services and other revenue	3,042		2,552		8,901		7,050
Revenue	$	112,282	$	91,852	$	322,139	$	257,537

Concentrations

We sell and market our products and services through our field sales force that works closely with our channel partners, which includes a network of distributors and resellers, in developing sales opportunities. We use a two-tiered channel model whereby we sell our products and services to our distributors, which in turn sell to resellers, which then sell to end-users. We derived 92%, 91%, 91% and 90% of revenue through our channel network in the three months ended September 30, 2020 and 2019 and the nine months ended September 30, 2020 and 2019, respectively. One of our distributors accounted for 43% of revenue in each of the three and nine months ended September 30, 2020 and 2019. That same distributor accounted for 42% and 40% of accounts receivable at September 30, 2020 and December 31, 2019, respectively.

Contract Balances

We generally bill our customers in advance and accounts receivable are recorded when we have the right to invoice the customer. Contract liabilities consist of deferred revenue and include customer billings and payments received in advance of performance under the contract. In the three months ended September 30, 2020 and 2019 and the nine months ended September 30, 2020 and 2019, we recognized revenue of $102.8 million, $84.6 million, $235.2 million and $184.3 million, respectively, that was included in the deferred revenue balance at the beginning of each of the respective periods.

Remaining Performance Obligations

At September 30, 2020, the future estimated revenue related to unsatisfied performance obligations was $399.7 million, of which approximately 76% is expected to be recognized as revenue over the succeeding twelve months, and the remainder is expected to be recognized over the four years thereafter.

Deferred Commissions

The following summarizes the activity of deferred incremental costs of obtaining a contract:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2020		2019		2020		2019
Beginning balance	$	71,768	$	61,866	$	72,265	$	59,434
Capitalization of contract acquisition costs	8,301		9,612		23,314		24,846
Amortization of deferred contract acquisition costs	(8,185)		(6,955)		(23,695)		(19,757)
Ending balance	$	71,884	$	64,523	$	71,884	$	64,523