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Note 3 - Revenue Recognition and Sales Commissions
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]

3. REVENUE RECOGNITION AND SALES COMMISSIONS

 

Revenue Recognition

 

Revenues are recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled in exchange for transferring those goods or services. Revenue is recognized based on the following five step model:

 

 

•

Identification of the contract with a customer

 

•

Identification of the performance obligations in the contract

 

•

Determination of the transaction price

 

•

Allocation of the transaction price to the performance obligations in the contract

 

•

Recognition of revenue when, or as, the Company satisfies a performance obligation

 

The following table represents revenues disaggregated by revenue source (in thousands). Sales taxes are excluded from revenues.

 

  

Three Months Ended June 30,

  

Six Months Ended June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Subscription services

 $69,013  $66,506  $139,218  $132,521 

Professional services

  2,543   2,692   5,098   5,623 

Total revenues, net

 $71,556  $69,198  $144,316  $138,144 

 

 
For the  three months ended June 30, 2024 and 2023, the Company recognized  $1.6 million and  $0.2 million in impairment losses on receivables and contract assets arising from the Company's contracts with customers, respectively. For the six months ended June 30, 2024 and 2023, the Company recognized $1.8 million and $0.4 million in impairment losses on receivables and contract assets arising from the Company's contracts with customers, respectively.

 

During the three months ended  June 30, 2024 and 2023, the Company recognized revenues of $47.2 million and $43.6 million, respectively, from amounts included in deferred revenue at the beginning of the respective periods. During the six months ended June 30, 2024 and 2023, the Company recognized revenues of $65.2 million and $62.1 million, respectively, from amounts included in deferred revenue at the beginning of the respective periods. As of June 30, 2024, approximately $538 million of revenue is expected to be recognized from remaining performance obligations under contracts with customers. The Company expects to recognize revenue related to approximately 43% of these remaining performance obligations over the next 12 months, with the remaining amounts recognized thereafter.

 

Sales Commissions

 

Sales commissions earned by the Company's sales employees are considered incremental and recoverable costs of obtaining a contract with a customer. The Company recorded amortization of deferred commissions of $3.0 million and $2.8 million for the three months ended June 30, 2024 and 2023, respectively, and $6.0 million and $5.5 million for the six months ended June 30, 2024 and 2023, respectively, which is included in sales and marketing expenses in the accompanying Condensed Consolidated Statements of Income.