Revenue Recognition

9 Months Ended

May 31, 2024

Revenue Recognition [Abstract]

Revenue Recognition

NOTE 4 – REVENUE RECOGNITION

Contract Balances

Our deferred subscription revenue and customer deposits totaled $106.0 million at May 31, 2024 and $111.2 million at August 31, 2023, of which $3.7 million was classified as components of other long-term liabilities at each of May 31, 2024, and August 31, 2023. The amount of deferred revenue that was generated from subscription offerings totaled $83.8 million at May 31, 2024 and $99.0 million at August 31, 2023. During the quarter and three quarters ended May 31, 2024, we recognized $36.7 million and $108.9 million of previously deferred subscription revenue, respectively.

Deferred subscription revenue primarily consists of billings or payments received in advance of revenue being recognized from subscription services. Deferred revenue is recognized in sales as the applicable revenue recognition criteria are met. We generally invoice customers in annual installments upon execution of a contract. Our Leader in Me membership offering is bifurcated into a portal membership obligation and a coaching delivery obligation. We have determined that it is appropriate to recognize revenue related to the portal membership over the term of the underlying contract and to recognize revenue from coaching as those services are performed. The combined contract amount is recorded in deferred subscription revenue until the performance obligations are satisfied. Any additional coaching or training days which are contracted independent of a Leader in Me membership are recorded as revenue in accordance with our general policy for services and products as described in our annual report on Form 10-K for the fiscal year ended August 31, 2023.

Remaining Performance Obligations

Whenever possible, we enter into multi-year non-cancellable contracts which are invoiced either upon execution of the contract or at the beginning of each annual contract period. Remaining transaction price represents contracted revenue that has not yet been recognized, including unearned revenue and unbilled amounts that will be recognized as revenue in future periods. Transaction price is influenced by factors such as inflation, the average length of the contract term, and the ability of the Company to continue to enter into multi-year non-cancellable contracts. At May 31, 2024, we had $153.2 million of remaining performance obligations, including our deferred subscription revenue. The remaining performance obligation does not include customer deposits, as these amounts are generally refundable at the client’s request prior to the satisfaction of the obligation.

Disaggregated Revenue Information

Refer to Note 9, Segment Information, to these condensed consolidated financial statements for our disaggregated revenue information.