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Revenue, Performance Obligations, Deferred Revenue and Deferred Costs
3 Months Ended
Sep. 30, 2020
Revenue From Contract With Customer [Abstract]  
Revenue, Performance Obligations, Deferred Revenue and Deferred Costs

NOTE 2 – Revenue, Performance Obligations, Deferred Revenue and Deferred Costs

The Company generates revenue from two primary sources: (1) subscription and transaction fees and (2) interest on funds held for customers. The Company’s customers include small and midsize businesses (SMB), accounting firms and financial institutions. The Company’s subscription and transaction fees are disaggregated by customer category and consisted of the following for the periods presented (in thousands):

 

 

 

Three months ended

September 30,

 

 

 

2020

 

 

2019

 

Small-to-midsize business and accounting firm customers

 

$

40,899

 

 

$

26,169

 

Financial institution customers

 

 

2,889

 

 

 

2,379

 

Total subscription and transaction fees

 

$

43,788

 

 

$

28,548

 

 

 

 

 

Remaining performance obligations with financial Institutions

As of September 30, 2020, the aggregate amount of transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) was $151.2 million. Of this amount, the Company expects to recognize $17.9 million within one year and $133.3 million thereafter.

Deferred revenue

Subscription and transaction fees from customers with which the Company has annual or multi-year contracts are generally billed in advance. These fees are initially recorded as deferred revenue and subsequently recognized as revenue as the performance obligation is satisfied. Deferred revenue is shown as current or non-current in the condensed consolidated balance sheets. During the three months ended September 30, 2020, the Company recognized $2.3 million of revenue that was included in the deferred revenue balance as of June 30, 2020. During the three months ended September 30, 2019, the Company recognized $1.3 million of revenue that was included in the deferred revenue balance as of June 30, 2019.

Deferred costs

Deferred costs consist of (i) deferred sales commissions that are incremental costs of obtaining customer contracts and (ii) deferred service costs, which include direct payroll costs and fees paid to customers in connection with the implementation of the product prior to its launching for general availability (go-live) to customers. Sales commissions paid on renewals are not material and not commensurate with sales commissions paid on the initial contract. Deferred sales commissions are amortized ratably over four to ten years, taking into consideration the initial contract term and expected renewal periods. Deferred service costs are amortized ratably over the estimated benefit period of the capitalized costs starting on the go-live date of the service. Deferred costs consisted of the following as of the dates presented (in thousands):

 

 

 

September 30,

 

 

June 30,

 

 

 

2020

 

 

2020

 

Deferred sales commissions:

 

 

 

 

 

 

 

 

Current

 

$

3,196

 

 

$

2,829

 

Non-current

 

 

5,949

 

 

 

5,613

 

Total deferred sales commissions

 

$

9,145

 

 

$

8,442

 

Deferred service costs:

 

 

 

 

 

 

 

 

Current

 

$

837

 

 

$

618

 

Non-current

 

 

10,802

 

 

 

4,474

 

Total deferred service costs

 

$

11,639

 

 

$

5,092

 

 

The current portion of deferred costs is included in prepaid expenses and other current assets and the non-current portion is included in other assets in the accompanying condensed consolidated balance sheets.