Revenue

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

Disaggregation of Revenue

The following table presents a summary of revenue:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Subscription revenue	$	183,268	$	156,764	$	531,133	$	446,257
Perpetual license and maintenance revenue	12,200		12,658		36,535		38,214
Professional services and other revenue	6,061		5,429		17,736		14,089
Revenue	$	201,529	$	174,851	$	585,404	$	498,560

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 93% of revenue through our channel network in the three and nine months ended September 30, 2023 and 92% of revenue through our channel network in the three and nine months ended September 30, 2022. One of our distributors accounted for 36% of revenue in the three and nine months ended September 30, 2023 and 38% of revenue in the three and nine months ended September 30, 2022. That same distributor accounted for 37% and 36% of accounts receivable at September 30, 2023 and December 31, 2022, 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, 2023 and 2022 and the nine months ended September 30, 2023 and 2022, we recognized revenue of $185.9 million, $156.3 million, $430.8 million and $350.6 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, 2023, the future estimated revenue related to unsatisfied performance obligations was $697.2 million, of which $528.4 million is expected to be recognized as revenue over the next 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)	2023		2022		2023		2022
Beginning balance	$	109,582	$	100,000	$	111,508	$	99,949
Capitalization of contract acquisition costs	14,527		12,837		36,819		35,240
Amortization of deferred contract acquisition costs	(12,565)		(11,561)		(36,783)		(33,913)
Ending balance	$	111,544	$	101,276	$	111,544	$	101,276