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REVENUE RECOGNITION
 12 Months Ended
Dec. 31, 2022
Revenue from Contract with Customer [Abstract]  
REVENUE RECOGNITION REVENUE RECOGNITION
The Company's typical performance obligations include the following:
Performance ObligationWhen Performance Obligation is Typically SatisfiedWhen Payment is Typically Due
Software and Product Revenue
Software licenses (perpetual or term)Upon transfer of control; typically, when made available for download (point in time)Generally, within 30 days of invoicing except for term licenses, which may be paid for over time
Software licenses (subscription)Upon activation of hosted site (over time)Generally, within 30 days of invoicing
HardwareWhen control of the hardware passes to the customer; typically, upon delivery (point in time)Generally, within 30 days of invoicing
Software upgradesUpon transfer of control; typically, when made available for download (point in time)Generally, within 30 days of invoicing
Customer Support Revenue
Customer supportRatably over the course of the support contract (over time)Generally, within 30 days of invoicing
Professional Services
Other professional services (excluding training services)As work is performed (over time)Generally, within 30 days of invoicing (upon completion of services)
TrainingWhen the class is taught (point in time)Generally, within 30 days of services being performed

Significant Judgments

The Company's contracts with customers often include promises to transfer multiple products and services to the customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment.

Judgment is required to determine the standalone selling price for each distinct performance obligation. The Company typically has more than one standalone selling price ("SSP") for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, the Company may use information such as the size of the customer and geographic region in determining the SSP.

Deferred Revenue

Deferred revenue is a contract liability representing amounts collected from or invoiced to customers in excess of revenue recognized. This results primarily from the billing of annual customer support agreements where the revenue is recognized over the term of the agreement. The value of deferred revenue will increase or decrease based on the timing of invoices and recognition of revenue.

Disaggregation of Revenue

The Company disaggregates its revenue from contracts with customers based on the nature of the products and services and the geographic regions in which each customer is domiciled. The Company's total revenue for the years ended December 31, 2022, 2021 and 2020 was disaggregated geographically as follows:
Year ended December 31, 2022Product revenueService revenue (maintenance)Service revenue (professional services)Total revenue
United States$175,189 $132,655 $44,819 $352,663 
Europe, Middle East and Africa147,523 75,948 29,310 252,781 
Asia Pacific95,828 41,677 13,594 151,099 
Other24,140 31,815 7,262 63,217 
$442,680 $282,095 $94,985 $819,760 

Year ended December 31, 2021Product revenueService revenue (maintenance)Service revenue (professional services)Total revenue
United States$196,058 $132,683 $47,296 $376,037 
Europe, Middle East and Africa138,203 79,475 30,349 248,027 
Asia Pacific92,803 41,945 18,183 152,931 
Other25,978 32,218 9,766 67,962 
$453,042 $286,321 $105,594 $844,957 

Year ended December 31, 2020Product revenueService revenue (maintenance)Service revenue (professional services)Total revenue
United States$201,347 $132,661 $48,611 $382,619 
Europe, Middle East and Africa149,567 73,475 25,226 248,268 
Asia Pacific90,201 36,628 19,627 146,456 
Other26,797 32,052 7,603 66,452 
$467,912 $274,816 $101,067 $843,795 

The Company's product revenue from its direct sales program and from indirect sales through its channel partner program for the years ended December 31, 2022, 2021 and 2020 was as follows (in thousands):
Year ended December 31,
202220212020
Indirect sales through channel program$131,998 $117,065 $134,876 
Direct sales310,682 335,977 333,036 
$442,680 $453,042 $467,912 

The Company's product revenue from sales to enterprise customers and from sales to service provider customers for the years ended December 31, 2022, 2021 and 2020 was as follows (in thousands):
Year ended December 31,
202220212020
Sales to enterprise customers$125,664 $111,494 $138,469 
Sales to service provider customers317,016 341,548 329,443 
$442,680 $453,042 $467,912 

The Company's product revenue and service revenue components by segment for the years ended December 31, 2022, 2021 and 2020 was as follows (in thousands):
Year ended December 31,
202220212020
Product revenue
  Cloud and Edge215,770 248,570 275,445 
  IP Optical Networks226,910 204,472 192,467 
    Total product revenue442,680 453,042 467,912 
Service revenue
  Maintenance
    Cloud and Edge222,238 228,321 229,035 
    IP Optical Networks59,857 58,000 45,781 
      Total maintenance revenue282,095 286,321 274,816 
  Professional services
    Cloud and Edge70,130 79,765 78,790 
    IP Optical Networks24,855 25,829 22,277 
      Total professional services revenue94,985 105,594 101,067 
        Total service revenue377,080 391,915 375,883 

Revenue Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables, which are contract assets, and customer advances and deposits, which are contract liabilities, in the Company's consolidated balance sheets. Amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals or upon achievement of contractual milestones. Completion of services and billing may occur subsequent to revenue recognition, resulting in contract assets. The Company may receive advances or deposits from its customers before revenue is recognized, resulting in contract liabilities which are classified as deferred revenue. These assets and liabilities are reported in the Company's consolidated balance sheets on a contract-by-contract basis as of the end of each reporting period. Changes in the contract asset and liability balances during the years ended December 31, 2022 and 2021 were not materially impacted by any factors other than billing and revenue recognition. Nearly all of the Company's deferred revenue balance is related to services revenue, primarily customer support contracts. Unbilled receivables stem primarily from engagements where services have been performed; however, billing cannot occur until services are completed.

In some arrangements, the Company allows customers to pay for term-based software licenses and products over the term of the software license. The Company also sells SaaS-based software under subscription arrangements, with payment terms over the term of the SaaS agreement. Amounts recognized as revenue in excess of amounts billed are recorded as unbilled receivables. Unbilled receivables that are anticipated to be invoiced in the next twelve months are included in Accounts receivable on the Company's consolidated balance sheets. The changes in the Company's accounts receivable, unbilled receivables and deferred revenue balances for the years ended December 31, 2022 and 2021 were as follows (in thousands):
Accounts receivableUnbilled accounts receivableDeferred revenue (current)Deferred revenue (long-term)
Balance at January 1, 2022$208,972 $73,945 $109,119 $20,619 
Increase (decrease), net(38,003)22,330 4,820 (1,365)
Balance at December 31, 2022$170,969 $96,275 $113,939 $19,254 

Accounts receivableUnbilled accounts receivableDeferred revenue (current)Deferred revenue (long-term)
Balance at January 1, 2021$179,331 $58,407 $96,824 $26,010 
Increase (decrease), net29,641 15,538 12,295 (5,391)
Balance at December 31, 2021$208,972 $73,945 $109,119 $20,619 

The Company recognized approximately $103 million of revenue in the year ended December 31, 2022 that was recorded as deferred revenue at December 31, 2021 and approximately $94 million of revenue in the year ended December 31, 2021 that was recorded as deferred revenue at December 31, 2020. Of the Company's deferred revenue reported as long-term in its
consolidated balance sheet at December 31, 2022, the Company expects that approximately $12 million will be recognized as revenue in 2024, approximately $5 million will be recognized as revenue in 2025 and approximately $2 million will be recognized as revenue in 2026 and beyond.

All freight-related customer invoicing is recorded as revenue, while the shipping and handling costs that occur after control of the promised goods or services transfer to the customer are reported as fulfillment costs, a component of Cost of revenue - product in the Company's consolidated statements of operations.

Deferred Commissions Cost

Sales commissions earned by the Company's employees are considered incremental and recoverable costs of obtaining a contract with a customer. The payments related to these costs have been deferred on our consolidated balance sheet and are being amortized over the expected life of the customer contract, which is generally five years. At December 31, 2022 and 2021, the Company had $3.6 million and $3.8 million, respectively, of deferred sales commissions capitalized.