Revenue Recognition

9 Months Ended

Aug. 31, 2022

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

Timing of Revenue Recognition

Our revenues are derived from licensing our products, and from related services, which consist of maintenance, hosting services, and consulting and education. Information relating to revenue from external customers by revenue type is as follows (in thousands):

 

	Three Months Ended				Nine Months Ended
(In thousands)	August 31, 2022		August 31, 2021		August 31, 2022		August 31, 2021
Performance obligations transferred at a point in time:
Software licenses	$	47,618	$	51,930	$	135,182	$	115,354
Performance obligations transferred over time:
Maintenance	91,043		82,875		272,337		239,921
Services	12,556		12,612		37,367		35,910
Total revenue	$	151,217	$	147,417	$	444,886	$	391,185

Geographic Revenue

In the following table, revenue attributed to North America includes sales to customers in the U.S. and sales to certain multinational organizations. Revenue from EMEA, Latin America and the Asia Pacific region includes sales to customers in each region plus sales from the U.S. to distributors in these regions. Information relating to revenue from external customers from different geographical areas is as follows (in thousands):

 

	Three Months Ended				Nine Months Ended
(In thousands)	August 31, 2022		August 31, 2021		August 31, 2022		August 31, 2021
North America	$	84,826	$	93,880	$	248,313	$	236,479
EMEA	52,670		40,999		156,006		122,560
Latin America	4,577		5,298		13,138		12,544
Asia Pacific	9,144		7,240		27,429		19,602
Total revenue	$	151,217	$	147,417	$	444,886	$	391,185

No single customer, partner, or country outside of the U.S. has accounted for more than 10% of our total revenue for the three and nine months ended August 31, 2022 and August 31, 2021.

Contract Balances

Unbilled Receivables and Contract Assets

The timing of revenue recognition may differ from the timing of customer invoicing. When revenue is recognized prior to invoicing and the right to the amount due from customers is conditioned only on the passage of time, we record an unbilled receivable on our condensed consolidated balance sheets. Our multi-year term license arrangements, which are typically billed annually, result in revenue recognition in advance of invoicing and the recognition of unbilled receivables.

As of August 31, 2022, invoicing of our long-term unbilled receivables is expected to occur as follows (in thousands):

2023	$	4,246
2024	11,390
2025	7,137
2026	3,199
Total	$	25,972

Contract assets, which arise when revenue is recognized prior to invoicing and the right to the amount due from customers is conditioned on something other than the passage of time, such as the completion of a related performance obligation, were $2.4 million as of August 31, 2022 and $5.0 million as of November 30, 2021. These amounts are included in unbilled receivables or long-term unbilled receivables on our condensed consolidated balance sheets.

Deferred Revenue

Deferred revenue is recorded when revenue is recognized subsequent to customer invoicing. Our deferred revenue balance is primarily made up of deferred maintenance.

As of August 31, 2022, the changes in deferred revenue were as follows (in thousands):

Balance, December 1, 2021	$	252,380
Billings and other	443,627
Revenue recognized	(444,886)
Balance, August 31, 2022	$	251,121

Transaction price 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. As

of August 31, 2022, transaction price allocated to remaining performance obligations was $256 million. We expect to recognize approximately 78% of the revenue within the next year and the remainder thereafter.

Deferred Contract Costs

Certain of our sales incentive programs meet the requirements to be capitalized. Depending upon the sales incentive program and the related revenue arrangement, such capitalized costs are amortized over the longer of (i) the product life, which is generally three to five years; or (ii) the term of the related revenue contract. We determined that a three to five year product life represents the period of benefit that we receive from these incremental costs based on both qualitative and quantitative factors, which include customer contracts, industry norms, and product upgrades. Total deferred contract costs were $8.2 million and $7.9 million as of August 31, 2022 and November 30, 2021, respectively, and are included in other current assets and other assets on our condensed consolidated balance sheets. Amortization of deferred contract costs is included in sales and marketing expense on our condensed consolidated statement of operations and was minimal in all periods presented.