Revenue from Contracts with Customers

12 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

3. Revenue from Contracts with Customers

Contract Assets and Contract Liabilities

(in thousands)	September 30,
	2022		2021
Contract asset	$	21,096	$	12,934
Deferred revenue	$	520,333	$	497,677

As of September 30, 2022, $16.9 million of our contract assets are expected to be transferred to receivables within the next 12 months and therefore are included in Other current assets. The remainder is included in Other assets and expected to be transferred within the next 24 months. As of September 30, 2021, $8.2 million of our contract asset balance was included in Other current assets.

Approximately $7.0 million of the September 30, 2021 contract asset balance was transferred to receivables during the year ended September 30, 2022 as a result of the right to payment becoming unconditional. The majority of the contract asset balance relates to two large professional services contracts with invoicing terms based on performance milestones. The net increase in contract assets of $8.2 million includes an increase of approximately $15.2 million related to revenue recognized in the period, net of billings.

During the year ended September 30, 2022, we recognized $491.6 million of revenue that was included in Deferred revenue as of September 30, 2021 and there were additional deferrals of $507.3 million, primarily related to new billings. In addition, deferred revenue increased by $6.9 million as a result of the acquisition of Intland Software. For subscription contracts, we generally invoice customers annually. The balance of total short- and long-term receivables as of September 30, 2022 was $871.0 million, compared to $744.6 million as of September 30, 2021.

Costs to Obtain or Fulfill a Contract

We recognize an asset for the incremental costs of obtaining a contract with a customer if the benefit of those costs is expected to be longer than one year. These deferred costs (primarily commissions) are amortized proportionately related to revenue over 5 years, which is generally longer than the term of the initial contract because of anticipated renewals as commissions for renewals are not commensurate with commissions related to our initial contracts. As of September 30, 2022 and September 30, 2021, deferred costs of $40.7 million and $40.2 million, respectively, were included in Other current assets and $77.0 million and $81.1 million, respectively, were included in Other assets. Amortization expense related to costs to obtain a contract with a customer was $50.9 million and $46.7 million in the years ended September 30, 2022 and 2021, respectively. There were no impairments of the contract cost asset in the years ended September 30, 2022 and 2021.

Remaining Performance Obligations

Our contracts with customers include amounts allocated to performance obligations that will be satisfied at a later date. As of September 30, 2022, the amounts include additional performance obligations of $520.3 million recorded in deferred revenue and $1,092.7 million that are not yet recorded in the Consolidated Balance Sheets. We expect to recognize approximately 57% of the total $1,613.0 million over the next 12 months, with the remaining amount thereafter.

Disaggregation of Revenue

(in thousands)	Year ended September 30,
	2022		2021		2020
Total recurring revenue	$	1,736,188	$	1,616,328	$	1,281,949
Perpetual license		34,065		33,013		32,668
Professional services		163,094		157,818		143,798
Total revenue	$	1,933,347	$	1,807,159	$	1,458,415

For further disaggregation of revenue by geographic region and product group see Note 18. Segment and Geographic Information.