Revenue from Contracts with Customers

9 Months Ended

Sep. 30, 2021

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 September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Term licenses	$	55,907	$	47,386	$	198,465	$	160,027
Perpetual licenses		11,696		7,637		32,165		23,557
Maintenance		31,296		29,374		91,539		86,467
Professional software services		3,390		3,413		9,219		8,035
Software related services		7,650		6,170		23,229		18,548
Client engineering services		10,060		10,868		31,005		34,386
Other		1,308		1,608		5,760		5,460
Total revenue	$	121,307	$	106,456	$	391,382	$	336,480

The Company derived approximately 12% and 11% of its total revenue through indirect sales channels for the nine months ended September 30, 2021 and 2020, respectively.

Costs to obtain a contract

As of September 30, 2021, and December 31, 2020, respectively, capitalized costs to obtain a contract were $5.3 million and $3.7 million recorded in Prepaid and other current assets and $0.5 million and $0.6 million recorded in Other long-term assets. Sales commissions were $2.4 million and $5.9 million, respectively, for the three and nine months ended September 30, 2021, and $2.0 million and $3.6 million, respectively for the three and nine months ended September 30, 2020. Sales commissions were included in Sales and marketing expense in the Company’s consolidated statement of operations.

Contract assets

As of September 30, 2021, contract assets were $5.8 million included in Accounts receivable, and $2.9 million included in Prepaid expenses and other current assets. As of December 31, 2020, contract assets were $6.7 million included in Accounts receivable, $1.4 million included in Prepaid expenses and other current assets, and $1.3 million included in Other long-term assets.

Deferred revenue

Approximately $71.8 million of revenue recognized during the nine months ended September 30, 2021, 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 $121.1 million and $120.3 million as of September 30, 2021 and 2020, respectively. The Company expects to recognize approximately 83% of the contracted revenue over the next 12 months and the remainder thereafter.