Revenue from Contracts with Customers

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

3.Revenue from contracts with customers

Disaggregation of revenue

The Company disaggregates its software revenue by type of performance obligation and timing of revenue recognition as follows (in thousands):

	Three Months Ended March 31,
	2023		2022
Term licenses and other	$	103,309	$	94,045
Perpetual licenses		9,100		12,124
Maintenance		35,601		33,337
Professional software services		1,633		1,391
Software related services		7,100		9,061
Client engineering services		7,776		8,012
Other		1,515		1,811
Total revenue	$	166,034	$	159,781

The Company derived approximately 12.1% and 12.2% of its total revenue through indirect sales channels for the three months ended March 31, 2023 and 2022, respectively.

Costs to obtain a contract

As of March 31, 2023, and December 31, 2022, respectively, capitalized costs to obtain a contract were $4.3 million and $3.9 million recorded in Prepaid and other current assets and $0.3 million and $0.4 million recorded in Other long-term assets in the Company’s consolidated balance sheets. Sales commissions were $2.0 million and $2.1 million, respectively, for the three months ended March 31, 2023 and 2022. Sales commissions were included in Sales and marketing expense in the Company’s consolidated statement of operations.

Contract assets

As of March 31, 2023, and December 31, 2022, respectively, contract assets were $8.4 million and $6.3 million included in Accounts receivable, and $2.4 million and $2.3 million included in Prepaid expenses and other current assets in the Company’s consolidated balance sheets.

Deferred revenue

Approximately $59.6 million of revenue recognized during the three months ended March 31, 2023, was included in deferred revenue at the beginning of the year.

Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Contracted revenue not yet recognized was $185.6 million and $148.7 million as of March 31, 2023 and 2022, respectively. Of the amount recorded as of March 31, 2023, the Company expects to recognize approximately 72% over the next 12 months and the remainder thereafter.