Contract Balances

3 Months Ended

Apr. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue and Performance Obligations

Subscription revenue is recognized over time and accounted for approximately 94% and 95% of our revenue for the three months ended April 30, 2019 and 2018.

The typical subscription term is one to three years. Most of our subscription contracts are noncancelable over the contractual term. Customers typically have the right to terminate their contracts for cause, if we fail to perform. As of April 30, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations was $574.0 million, which consists of both billed and unbilled consideration that we expect to recognize as subscription revenue. We expect to recognize 53% of the transaction price in the twelve months following April 30, 2019, in our consolidated statement of operations and comprehensive loss with the remainder recognized thereafter.

We elected to apply the practical expedient to not disclose the transaction price allocated to remaining performance obligations for contracts with a contract term of one year or less. In addition, we do not disclose the transaction price related to revenue from professional services, training services and web revenue as revenue from these sources is recognized within one year.

Contract Balances

Contract assets represent amounts for which we have recognized revenue, pursuant to our revenue recognition policy, for contracts that have not yet been invoiced to our customers where there is a remaining performance obligation, typically for multi-year arrangements. Total contract assets were $14.6 million and $11.9 million as of April 30, 2019 and January 31, 2019, of which $1.3 million was noncurrent and included within "Other assets—noncurrent" on our consolidated balance sheets as of both periods. The change in contract assets reflects the difference in timing between our satisfaction of remaining performance obligations and our contractual right to bill our customers.

Contract liabilities consist of deferred revenue and include payments received in advance of performance under the contract. Such amounts are generally recognized as revenue over the contractual period. For the three months ended April 30, 2019 and 2018, we recognized revenue of $157.0 million and $112.0 million that was included in the corresponding contract liability balance at the beginning of the periods presented.

We receive payments from customers based upon contractual billing schedules. We record accounts receivable when the right to consideration becomes unconditional. Payment terms on invoiced amounts are typically 30 days.

Deferred Contract Acquisition and Fulfillment Costs

The following table represents a rollforward of our deferred contract acquisition costs:



	Three Months Ended April 30,
(in thousands)	2019			2018
Beginning balance	$	115,985		$	77,344
Additions to deferred contract acquisition costs	17,401			11,969
Amortization of deferred contract acquisition costs	(13,150		)	(8,788		)
Cumulative translation adjustment	(1,103		)	—
Ending balance	$	119,133		$	80,525

Deferred contract acquisition costs, current	$	3,209		$	2,124
Deferred contract acquisitions costs, noncurrent	115,924			78,401
Total	$	119,133		$	80,525

The following table represents our contract fulfillment costs, which include third-party service fees:



	Three Months Ended April 30,
(in thousands)	2019			2018
Beginning balance	$	3,432		$	3,316
Additions to deferred contract fulfillment costs	3,086			357
Amortization of deferred contract fulfillment costs	(1,110		)	(458		)
Ending balance	$	5,408		$	3,215

Deferred contract fulfillment costs, current	$	2,493		$	1,188
Deferred contract fulfillment costs, noncurrent	2,915			2,027
Total	$	5,408		$	3,215

Current deferred contract acquisition and fulfillment costs are included in "Prepaid expense and other current assets" and noncurrent costs are included in "Other assets—noncurrent" on our consolidated balance sheets.