Note 21 - Revenue

12 Months Ended

Jan. 31, 2023

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

(21) Revenue

Revenue Components and Performance Obligations

Subscription services

The Company offers subscriptions that provide customers access to a broad-based spectrum of learning options including access to cloud-based learning contend and talent management solutions. The Company’s cloud-based subscription solutions normally do not provide customers with the right to take possession of the software supporting the platform or to download course content without continuing to incur fees for hosting services and, as a result, are accounted for as service arrangements. Access to the platform and course content represents a series of distinct services as the Company continually provides access to, and fulfill its obligation to, the end customer over the subscription term. The series of distinct services represents a single performance obligation that is satisfied over time. Accordingly, the fixed consideration related to subscription revenue is usually recognized on a straight-line basis over the contract term, beginning on the date that the service is made available to the customer. The Company’s subscription contracts typically vary from one year to three years. The Company’s cloud-based solutions arrangements are mostly non-cancellable, non-refundable, and are invoiced in advance of the subscription services being provided.

Virtual, on-demand and classroom, and individualized coaching

The Company’s virtual, on-demand and classroom training, and individualized coaching provide customers with technical training and leadership coaching. Revenue is recognized in the period in which the services are performed. Billing is in advance of the services being provided or immediately after the services have been provided.

Professional services

The Company also sells professional services related to its cloud solutions which are typically considered distinct performance obligations and are recognized over time as services are performed. For fixed-price contracts, revenue is recognized based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided (proportional performance method). These services usually consist of implementation, integration, and general consulting. Mostly, the Company’s professional service engagements are short in duration. Billing is commonly in advance of the services being provided.

Disaggregated Revenue and Geography Information

The following is a summary of revenues by type for the fiscal year ended January 31, 2023 (Successor), the period from June 12, 2021 through January 31, 2022 (Successor), the period from February 1, 2021 through June 11, 2021 (Predecessor (SLH)), the period from August 28, 2020 through January 31, 2021 (Predecessor (SLH)), and the period from February 1, 2020 through August 27, 2020 (Predecessor (PL)) (in thousands):

	Fiscal 2023		Fiscal 2022				Fiscal 2021
	Successor		Successor		Predecessor (SLH)		Predecessor (SLH)		Predecessor (PL)
	From		From		From		From		From
	February 1, 2022 to		June 12, 2021 to		February 1, 2021		August 28, 2020		February 1, 2020
	January 31, 2023		January 31, 2022		to June 11, 2021		to January 31, 2021		to August 27, 2020
SaaS and subscription services	$	365,447	$	208,229	$	97,406	$	69,698	$	188,925
Virtual, on-demand and classroom, and individualized coaching		170,746		132,586		—		—		—
Professional services		18,931		11,028		5,088		3,552		8,747
Total net revenues (1)	$	555,124	$	351,843	$	102,494	$	73,250	$	197,672

The following table sets forth our revenues by geographic region for the fiscal year ended January 31, 2023 (Successor), the period from June 12, 2021 through January 31, 2022 (Successor), the period from February 1, 2021 through June 11, 2021 (Predecessor (SLH)), the period from August 28, 2020 through January 31, 2021 (Predecessor (SLH)), and the period from February 1, 2020 through August 27, 2020 (Predecessor (PL)) , (in thousands):

Other than the United States, no single country accounted for more than 10% of revenue for all periods presented.

	Fiscal 2023		Fiscal 2022				Fiscal 2021
	Successor		Successor		Predecessor (SLH)		Predecessor (SLH)		Predecessor (PL)
	From		From		From		From		From
	February 1, 2022 to		June 12, 2021 to		February 1, 2021		August 28, 2020		February 1, 2020
	January 31, 2023		January 31, 2022		to June 11, 2021		to January 31, 2021		to August 27, 2020
Revenue:
United States	$	356,604	$	212,055	$	77,488	$	55,751	$	155,333
Europe, Middle East and Africa		148,154		102,982		14,283		10,354		26,159
Other Americas		30,512		24,922		5,197		3,237		5,784
Asia-Pacific		19,854		11,884		5,526		3,908		10,396
Total net revenues	$	555,124	$	351,843	$	102,494	$	73,250	$	197,672

Deferred Revenue

Deferred revenue activity for the fiscal year ended January 31, 2023 was as follows (in thousands):

Deferred revenue at January 31, 2022 (Successor)	$	260,949
Codecademy acquired balance		18,396
Billings deferred		558,233
Recognition of prior deferred revenue		(555,124	)
Deferred revenue at January 31, 2023 (Successor)	$	282,454

Deferred revenue performance obligations relate predominately to time-based SaaS and subscription services that are billed in advance of services being rendered.

Deferred Contract Acquisition Costs

Deferred contract acquisition cost activity for the fiscal year ended January 31, 2023 was as follows (in thousands):

Deferred contract acquisition costs at January 31, 2022 (Successor)	$	13,248
Contract acquisition costs		30,950
Recognition of contract acquisition costs		(19,604	)
Deferred contract acquisition costs at January 31, 2023 (Successor)	$	24,594