Contract Balances and Performance Obligation

12 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Text Block]

Contract Balances and Performance Obligations

Contract Balances

We record a receivable when we satisfy a performance obligation prior to invoicing if only the passage of time is required before payment is due or if we have an unconditional right to consideration before we satisfy a performance obligation. We record a contract asset when we satisfy a performance obligation prior to invoicing but our right to consideration is conditional. We record deferred revenue when the payment is made or due before we satisfy a performance obligation.

Receivables at September 30, 2020 and 2019 consisted of the following: 

	September 30,
	2020			2019
	(In thousands)
Billed	$	211,776		$	206,714
Unbilled	181,550			127,651
	393,326			334,365
Less: allowance for doubtful accounts	(5,072		)	(2,568		)
Net receivables	388,254			331,797
Less: long-term receivables *	(54,074		)	(34,370		)
Short-term receivables *	334,180			297,427

(*) Short-term receivables and long-term receivables were recorded in accounts receivable, net and other assets, respectively, within the accompanying consolidated balance sheets.

Activity in the allowance for doubtful accounts was as follows: 

	Year Ended September 30,
	2020			2019
	(In thousands)
Allowance for doubtful accounts, beginning balance	$	2,568		$	3,439
Add: expense	3,199			518
Less: write-offs (net of recoveries)	(695		)	(1,389		)
Allowance for doubtful accounts, ending balance	$	5,072		$	2,568

Contract assets balance at September 30, 2020 and 2019 was immaterial.

Deferred revenue primarily relates to our maintenance and SaaS contracts billed annually in advance and generally recognized ratably over the term of the service period. Significant changes in the deferred revenues balances are as follows:

	Year Ended September 30,
	2020			2019
	(In thousands)
Deferred revenues, beginning balance	$	116,320		$	108,118
Revenue recognized that was included in the deferred revenues balance at the beginning of the period	(101,640		)	(93,265		)
Increases due to billings, excluding amounts recognized as revenue during the period	107,461			101,467
Deferred revenues, ending balance (*)	$	122,141		$	116,320

(*) Ending balance at September 30, 2020 included current portion of $115.1 million and long-term portion of $7.0 million that were recorded in deferred revenue and other liabilities, respectively, within the consolidated balance sheets. Ending balance at September 30, 2019 included current portion of $111.0 million and long-term portion of $5.3 million that were recorded in deferred revenue and other liabilities, respectively, within the consolidated balance sheets.

Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to provide customers with financing or to receive financing from our customers. Examples include multi-year on-premises licenses that are invoiced annually with revenue recognized upfront, and invoicing at the beginning of a subscription term with revenue recognized ratably over the contract period.

Performance Obligations

Revenue allocated to remaining performance obligations represents contracted revenue that will be recognized in future periods, which is comprised of deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. This does not include:

• Revenue that will be recognized in future periods from usage-based royalty from license sales;

• SaaS transactional revenue from variable considerations that will be recognized in the distinct service period during which it is earned; and

• Revenue from variable considerations that will be recognized in accordance with the “right-to-invoice” practical expedient, such as fees from our professional services billed based on a time and materials basis.

Revenue allocated to remaining performance obligations was $298.0 million as of September 30, 2020, of which we expect to recognize approximately 50% over the next 18 months and the remainder thereafter. Revenue allocated to remaining performance obligations was $238.4 million as of September 30, 2019.