Receivables, Contract Assets, Contract Liabilities and Performance Obligations

12 Months Ended

Dec. 31, 2024

Revenue from Contract with Customer [Abstract]

Receivables, Contract Assets, Contract Liabilities and Performance Obligations

Contract Balances

The following table provides information about receivables, contract assets and contract liabilities balances as of December 31, 2024 and 2023 (in thousands):


	December 31,
	2024		2023
Current receivables, which are included in “Accounts receivable, net”	$	4,172,104	$	3,568,290
Contract assets, net	81,980		120,518
Long-term accounts receivable, net	845,943		412,666
Long-term contract assets, net	$	86,953	$	132,780
Contract liabilities, which are included in “Accrued expenses and other current liabilities” and “Other liabilities”	$	109,615	$	107,217

Significant changes in the gross contract assets balances during the years ended December 31, 2024 and 2023 are as follows (in thousands):


	Contract Assets
Balances at December 31, 2022	$	7,909
Balances at Contract assets acquired through business combination	246,666
Reclassification of beginning contract assets to receivables, as a result of rights to consideration becoming unconditional	(33,638)
Contract assets recognized, net of reclassification to receivables	51,350
Balances at December 31, 2023	$	272,287
Reclassification of beginning contract assets to receivables, as a result of rights to consideration becoming unconditional	(85,619)
Contract assets recognized, net of reclassification to receivables	18,182
Measurement period adjustments to acquired contract assets	(26,412)
Balances at December 31, 2024	$	178,438

Contract assets consist of amounts the Company is entitled to for the resale of third-party consumption-based services, prior to payment becoming unconditional. In these transactions, the Company invoices clients for the gross amount of consideration it is responsible to collect, including amounts ultimately passed on to the third-party service providers. As of December 31, 2024, contract assets, net of allowances, were $168,933,000.

Gross contract assets by our internal risk ratings as of December 31, 2024 are summarized as follows (in thousands):


	Contract Assets
Low risk	$	40,116
Moderate risk	78,248
High risk	60,074
Total contract assets	$	178,438

Significant changes in the liabilities balances during the years ended December 31, 2024 and 2023 are as follows (in thousands):



	Contract Liabilities
Balances at December 31, 2022	$	102,057
Reclassification of the beginning contract liabilities to revenue, as the result of performance obligations satisfied	(67,351)
Cash received in advance and not recognized as revenue	72,511
Balances at December 31, 2023	$	107,217
Reclassification of the beginning contract liabilities to revenue, as the result of performance obligations satisfied	(75,857)
Cash received in advance and not recognized as revenue	78,255
Balances at December 31, 2024	$	109,615

Remaining performance obligations

The following table includes estimated net sales related to performance obligations that are unsatisfied (or partially unsatisfied) as of December 31, 2024 that are expected to be recognized in the future (in thousands):


	Services
2025	$	122,937
2026	47,385
2027	28,313
2028 and thereafter	35,259
Total remaining performance obligations	$	233,894

With the exception of remaining performance obligations associated with our OneCall Support Services contracts which are included in the table above regardless of original duration, the remaining performance obligations that have original expected durations of one year or less are not included in the table above. Amounts not included in the table above have an average original expected duration of seven months. Additionally, for our time and material services contracts, whereby we have the right to consideration from a client in an amount that corresponds directly with the value to the client of our performance completed to date, we recognized revenue in the amount to which we have a right to invoice as of December 31, 2024 and do not disclose information about related remaining performance obligations in the table above. Our open time and material contracts at December 31, 2024, have an average expected duration of 29 months.

Assets recognized for costs of obtaining a contract with a customer

Sales commissions are the only significant incremental costs incurred to obtain contracts with our clients. The majority of our contracts are completed within a one-year performance period, and for contracts with a specified term of one year or less, we recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less. We record sales commissions on contracts with performance periods that exceed one year as an asset and amortize the asset to expense over the related contract performance period. As of December 31, 2024 and 2023, the related asset balance was $11,912,291 and $11,892,384, respectively. The expense is expected to be recognized over the next 60 months.