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Revenue from Contracts with Customers | 9 Months Ended
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Sep. 30, 2024
Revenue from Contract with Customer [Abstract] |
Revenue from Contracts with Customers | Incremental Costs to Obtain a Contract with a Customer Deferred costs associated with obtaining customer contracts, specifically commission and incentive payments, as of September 30, 2024 and December 31, 2023 were as follows (in thousands):
| September 30, 2024 |  | December 31, 2023
Deferred costs included in prepaid expenses and other current assets | $ | 61,272 |  |  | $ | 44,383 |
Deferred costs included in other assets | 49,772 |  |  | 42,738 |
Total deferred costs | $ | 111,044 |  |  | $ | 87,121 |
Information related to incremental costs to obtain a contract with a customer for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Amortization expense related to deferred costs | $ | 17,179 |  |  | $ | 12,840 |  |  | $ | 46,916 |  |  | $ | 37,225 |
Incremental costs capitalized | 27,962 |  |  | 15,650 |  |  | 70,668 |  |  | 45,448 |
Amortization expense related to deferred costs is primarily included in sales and marketing expense in the interim condensed consolidated statements of income. Revenue from Contracts with Customers The Company sells its services through a sales force located both domestically and internationally. Revenue derived from operations outside of the U.S. is determined based on the country in which the sale originated. Other than the U.S., no single country accounted for 10% or more of the Company’s total revenue for any reported period. Revenue by geography included in the Company’s interim condensed consolidated statements of income for the three and nine months ended September 30, 2024 and 2023 was as follows (in thousands):
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
U.S. | $ | 524,611 |  |  | $ | 498,536 |  |  | $ | 1,545,654 |  |  | $ | 1,452,431 |
International | 480,068 |  |  | 466,948 |  |  | 1,425,575 |  |  | 1,364,472 |
Total revenue | $ | 1,004,679 |  |  | $ | 965,484 |  |  | $ | 2,971,229 |  |  | $ | 2,816,903 |
The Company reports its revenue in three solution categories: security, delivery and compute. Security includes solutions that are designed to protect business online by keeping infrastructure, websites, applications and users safe. Delivery includes solutions that are designed to enable business online, including media delivery and web performance. Compute includes cloud computing, edge applications, cloud optimization and storage. Revenue by solution category included in the Company’s interim condensed consolidated statements of income for the three and nine months ended September 30, 2024 and 2023 was as follows (in thousands):
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Security | $ | 518,670 |  |  | $ | 455,792 |  |  | $ | 1,508,059 |  |  | $ | 1,294,290 |
Delivery | 319,132 |  |  | 379,304 |  |  | 1,000,289 |  |  | 1,153,386 |
Compute | 166,877 |  |  | 130,388 |  |  | 462,881 |  |  | 369,227 |
Total revenue | $ | 1,004,679 |  |  | $ | 965,484 |  |  | $ | 2,971,229 |  |  | $ | 2,816,903 |
Most security, delivery and compute services represent obligations that are satisfied over time as the customer simultaneously receives and consumes the services provided by the Company. Accordingly, the majority of the Company's revenue is recognized over time, generally ratably over the term of the arrangement due to consistent monthly usage commitments that expire each period. Any usage over a given commitment is recognized in the period in which the units are served. A small percentage of the Company's contracts are satisfied at a point in time, such as one-time professional services contracts, integration services and most license sales where the primary obligation is delivery of the license at the start of the term. In these cases, revenue is recognized at a point in time of delivery or satisfaction of the performance obligation. During the nine months ended September 30, 2024 and 2023, the Company recognized $99.3 million and $98.2 million of revenue that was included in deferred revenue as of December 31, 2023 and 2022, respectively. As of September 30, 2024, the aggregate amount of remaining performance obligations from contracts with customers was $3.5 billion. The Company expects to recognize approximately 65% of its remaining performance obligations as revenue over the next 12 months and approximately 30% over the next two to three years, with the remaining thereafter. Remaining performance obligations represent the amount of the transaction price under contracts with customers that are attributable to performance obligations that are unsatisfied or partially satisfied at the reporting date. This consists of future committed revenue for monthly, quarterly or annual periods within current contracts with customers, as well as deferred revenue arising from consideration invoiced in prior periods for which the related performance obligations have not been satisfied. It excludes estimates of variable consideration, such as usage-based contracts with no committed contract, as well as anticipated renewed contracts. Revenue recognized during the nine months ended September 30, 2024 and 2023, related to performance obligations satisfied in previous periods was not material.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 9 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-9 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 10 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-10 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-15 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-13 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 606 -Publisher FASB -URI https://asc.fasb.org/606/tableOfContent + Details
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