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Revenue Recognition

9 Months Ended

Apr. 30, 2020

Revenue Recognition and Deferred Revenue [Abstract]

Revenue Recognition

Note 2—Revenue Recognition

The Company earns revenue from contracts with customers, primarily through the provision of retail telecommunications and payment offerings as well as wholesale international long-distance traffic termination. The Company has two reportable business segments, Telecom & Payment Services and net2phone. The Telecom & Payment Services segment is comprised of Core and Growth verticals. Core includes BOSS Revolution Calling, an international long-distance calling service marketed primarily to immigrant communities in the United States, Carrier Services, which provides international long-distance termination and outsourced traffic management solutions to telecoms worldwide, and Mobile Top-Up, which enables customers to transfer airtime and bundles of airtime, messaging and data credits to mobile accounts internationally and domestically. Core also includes smaller communications and payment offerings, many in harvest mode. Growth includes National Retail Solutions, which operates a point-of-sale terminal-based network for independent retailers, BOSS Revolution Money Transfer, an international money remittance service for customers in the United States, and BOSS Revolution Mobile, a mobile virtual network operator in the United States. The net2phone segment is comprised of net2phone-Unified Communications as a Service ("UCaaS"), a unified cloud-based communications service for businesses in North and South America and certain other international markets, and net2phone-Platform Services, which provides telephony services to cable operators and other businesses by leveraging a common technology platform.

The Company's core operations are mostly minute-based, paid-voice communications services, and revenue is primarily recognized at a point in time. Telecom & Payment Services' growth initiatives and net2phone-UCaaS are technology-driven, synergistic businesses that leverage the Company's core assets, and revenue, in some cases, is recognized over time. The Company's most significant revenue streams are from BOSS Revolution Calling, Carrier Services, and Mobile Top-Up. BOSS Revolution Calling and Mobile Top-Up are sold direct-to-consumers and through distributors and retailers.

Disaggregated Revenues

The following table shows the Company's revenues disaggregated by business segment and service offered to customers:

		Three Months Ended April 30,								Nine Months Ended April 30,
		2020				2019				2020				2019
		(in thousands)
Core Operations:
BOSS Revolution Calling		$	111,541			$	120,455			$	340,557			$	366,114
Carrier Services			87,306				120,955				302,482				391,073
Mobile Top-Up			85,109				67,567				237,741				197,189
Other			10,127				12,202				32,484				43,730
Growth			14,707				7,659				34,078				20,531
Total Telecom & Payment Services			308,790				328,838				947,342				1,018,637
net2phone-UCaaS			8,137				6,651				23,298				17,483
net2phone-Platform Services			4,409				5,766				14,785				16,924
Total net2phone			12,546				12,417				38,083				34,407
Total		$	321,336			$	341,255			$	985,425			$	1,053,044

The following table shows the Company's revenues disaggregated by geographic region, which is determined based on selling location:

(in thousands)		Telecom & Payment Services				net2phone				Total
Three Months Ended April 30, 2020
United States		$	216,310			$	8,344			$	224,654
Outside the United States:
United Kingdom			26,360				3				26,363
Netherlands			52,237				—				52,237
Other			13,883				4,199				18,082
Total outside the United States			92,480				4,202				96,682
Total		$	308,790			$	12,546			$	321,336

(in thousands)		Telecom & Payment Services				net2phone				Total
Three Months Ended April 30, 2019
United States		$	216,271			$	8,833			$	225,104
Outside the United States:
United Kingdom			44,476				3				44,479
Netherlands			48,817				—				48,817
Other			19,274				3,581				22,855
Total outside the United States			112,567				3,584				116,151
Total		$	328,838			$	12,417			$	341,255

(in thousands)		Telecom & Payment Services				net2phone				Total
Nine Months Ended April 30, 2020
United States		$	645,909			$	25,452			$	671,361
Outside the United States:
United Kingdom			98,304				10				98,314
Netherlands			156,870				—				156,870
Other			46,259				12,621				58,880
Total outside the United States			301,433				12,631				314,064
Total		$	947,342			$	38,083			$	985,425

(in thousands)		Telecom & Payment Services				net2phone				Total
Nine Months Ended April 30, 2019
United States		$	673,141			$	24,857			$	697,998
Outside the United States:
United Kingdom			143,887				19				143,906
Netherlands			147,796				—				147,796
Other			53,813				9,531				63,344
Total outside the United States			345,496				9,550				355,046
Total		$	1,018,637			$	34,407			$	1,053,044

Remaining Performance Obligations

The Company does not have any significant revenue from performance obligations satisfied or partially satisfied in previous reporting periods. The Company's remaining performance obligations at April 30, 2020 had an original expected duration of one year or less.

Accounts Receivable and Contract Balances

The timing of revenue recognition may differ from the time of billing to the Company's customers. Trade accounts receivable in the Company's consolidated balance sheets represent unconditional rights to consideration. An entity records a contract asset when revenue is recognized in advance of the entity's right to bill and receive consideration. The Company has not identified any contract assets.

Contract liabilities arise when the Company receives consideration or bills its customers prior to providing the goods or services promised in the contract. The primary component of the Company's contract liability balance is the payments received for its prepaid BOSS Revolution Calling, traditional calling cards, and Mobile Top-Up services. Contract liabilities are recognized as revenue when services are provided to the customer. The contract liability balances are presented in the Company's consolidated balance sheet as "Deferred revenue".

The following table presents information about the Company's contract liability balance:

		Three Months Ended April 30,								Nine Months Ended April 30,
		2020				2019				2020				2019
		(in thousands)
Revenue recognized in the period from amounts included in the contract liability balance at the beginning of the period		$	23,600			$	25,282			$	31,306			$	30,363

Deferred Customer Contract Acquisition and Fulfillment Costs

The Company recognizes as an asset its incremental costs of obtaining a contract with a customer that it expects to recover. The Company charges its direct costs to fulfill contracts to expense as incurred. The Company's incremental costs of obtaining a contract with a customer are sales commissions paid to acquire customers. For Telecom & Payment Services, the Company applies the practical expedient whereby the Company primarily charges these costs to expense when incurred because the amortization period would be one year or less for the asset that would have been recognized from deferring these costs. For net2phone-UCaaS sales, employees and third parties receive commissions on sales to end users. The Company amortizes the deferred costs over the expected customer relationship period when it is expected to exceed one year.

The Company's deferred customer contract acquisition costs were as follows:

		April 30, 2020				July 31, 2019
		(in thousands)
Deferred customer contract acquisition costs included in "Other current assets"		$	2,156			$	1,474
Deferred customer contract acquisition costs included in "Other assets"			2,162				1,716
Total		$	4,318			$	3,190

The Company's amortization of deferred customer contract acquisition costs during the periods were as follows:

		Three Months Ended April 30,								Nine Months Ended April 30,
		2020				2019				2020				2019
		(in thousands)
Amortization of deferred customer contract acquisition costs		$	616			$	466			$	1,781			$	1,218