REVENUE (Notes)

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

REVENUE

REVENUE

Disaggregated Revenue and Geography Information

Through the evaluation of the discrete financial information that is regularly reviewed by the chief operating decision makers (our chief executive officer and chief financial officer), we have determined that we have one reporting unit and operating segment.

The following table sets forth our revenues by geographic region for the three and nine months ended September 30, 2023 and 2022 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenues:
United States	$	38,038	$	46,206	$	125,067	$	130,755
Other Americas	5,436		6,167		20,734		19,467
Europe, Middle East and Africa	34,647		36,865		108,574		112,026
Asia-Pacific	12,888		13,747		42,987		39,066
Total net revenues	$	91,009	$	102,985	$	297,362	$	301,314

The opening and closing balances of the Company's accounts receivable from contracts with customers were $76.8 million and $56.4 million for the nine months ended September 30, 2023, respectively, and $77.0 million and $55.3 million for the nine months ended September 30, 2022, respectively.

Contract Asset

Contract asset activity for the nine months ended September 30, 2023 and 2022 was as follows (in thousands):

	September 30, 2023		September 30, 2022
Contract asset at beginning of period	$	37,765	$	25,397
Revenue in excess of billings	63,251		51,400
Customer billings	(59,944)		(47,427)
Contract asset at end of period	$	41,072	$	29,370
Less: long-term portion (recorded in other long-term assets)	4,354		11,642
Contract asset, current portion	$	36,718	$	17,728

Deferred Revenue

Deferred revenue activity for the nine months ended September 30, 2023 and 2022 was as follows (in thousands):

	September 30, 2023		September 30, 2022
Deferred revenue at beginning of period	$	94,150	$	98,082
Billings deferred	55,109		57,094
Recognition of prior deferred revenue	(88,537)		(78,501)
Deferred revenue at end of period	$	60,722	$	76,675

A summary of the significant performance obligations included in deferred revenue is as follows (in thousands):

	September 30, 2023
Product	$	2,802
Subscription	15,497
Maintenance contracts	39,553
Implied PCS	2,870
Deferred revenue at September 30, 2023	$	60,722

Remaining Performance Obligations

For transaction prices allocated to remaining performance obligations, we apply practical expedients and do not disclose quantitative or qualitative information for remaining performance obligations (i) that have original expected durations of one year or less and (ii) where we recognize revenue equal to what we have the right to invoice and that amount corresponds directly with the value to the customer of our performance to date.

Historically, for many of our products, we had an ongoing practice of making when-and-if-available software updates available to customers free of charge for a period of time after initial sales to customers. The expectation created by this practice of providing free Software Updates represents an implied obligation of a form of post-contract customer support (“Implied PCS”) which represents a performance obligation. While we have ceased providing Implied PCS on new product offerings, we continue to provide Implied PCS for older products that were predominately sold in prior years. Revenue attributable to Implied PCS performance obligations is recognized over time on a ratable basis over the period that Implied PCS is expected to be provided, which is typically six years. We have remaining performance obligations of $2.9 million attributable to Implied PCS recorded in deferred revenue as of September 30, 2023. We expect to recognize revenue for these remaining performance obligations of $0.4 million for the remainder of 2023 and $1.2 million, $0.7 million, $0.4 million and $0.2 million for the years ending December 31, 2024, 2025, 2026, and 2027, respectively, and an immaterial amount thereafter.

As of September 30, 2023, we had approximately $16.7 million of transaction price allocated to remaining performance obligations for certain enterprise agreements that have not yet been fully invoiced. Approximately $14.2 million of these performance obligations were unbilled as of September 30, 2023. Remaining performance obligations represent obligations we must deliver for specific products and services in the future where there is not yet an enforceable right to invoice the customer. Our remaining performance obligations do not include contractually committed minimum purchases that are common in our strategic purchase agreements with resellers since our specific obligations to deliver products or services is not yet known, as customers may satisfy such commitments by purchasing an unknown combination of current or future product offerings. While the timing of fulfilling individual performance obligations under the contracts can vary dramatically based on customer requirements, we expect to recognize the $16.7 million in roughly equal installments through 2025.

Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations due to contract breach, contract amendments, and changes in the expected timing of delivery.