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Revenue | 3 Months Ended
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Mar. 31, 2019
Revenue |
Revenue | Note 4 – Revenue We recognize revenue in accordance with ASC 606 “Revenue from Contracts with Customers” (“Topic 606”), as described below. Term Licenses The Company considers revenue from arrangements that include term licenses to our software to be functional intellectual property. This requires recognition at the point in time all of the revenue recognition criteria under Topic 606 are met, which for the Company is generally when the customer is provided access to the software and the license term has commenced. Revenue from the license of software is recorded upon shipment or, if an acceptance period is allowed, at the latter of shipment or customer acceptance. No significant obligations or contingencies exist with regard to delivery, customer acceptance or rights of returns at the time revenue is recognized. We have established a stand-alone selling price (SSP) for all other performance obligations in the contract. Accordingly, the Company recognizes revenue from these licenses, based on the residual approach due to highly variable pricing, at the beginning of the license period and recognizes the transaction price allocated to the other performance obligations in the contract (typically maintenance and support) over the period in which those performance obligations are satisfied. This is consistent with the method of recognizing revenue for perpetual licenses of intellectual property. Fees paid to third party software providers in term license arrangements are recognized when the term license revenues are recognized. For large-volume transactions, we may negotiate a specific price that is based on the number of users of the software license or quantities of hardware supplied. The per unit prices for large-volume transactions are generally lower than transactions for smaller quantities and the price differences are commonly referred to as volume-purchase discounts. Disaggregation of Revenues The following tables present our revenues disaggregated by major products and services, geographical region and timing of revenue recognition. Revenue by major products (in thousands)
|  |  | Three Months Ended March 31,
|  |  | 2019 |  | 2018
Hardware products |  |  | $ | 24,290 |  | $ | 17,491
Software licenses |  |  |  | 7,571 |  |  | 16,003
Subscription |  |  |  | 5,251 |  |  | 2,970
Professional services |  |  |  | 809 |  |  | 964
Maintenance, support and other |  |  |  | 9,686 |  |  | 8,004
Total Revenue |  |  | $ | 47,608 |  | $ | 45,432
Revenue by location of customer for the three months ended March 31, 2019 and 2018 (in thousands)
|  | EMEA |  | Americas |  | APAC |  | Total |
Total Revenue: |  |  |  |  |  |  |  |  |  |  |  |  |
2019 |  | $ | 25,599 |  | $ | 12,731 |  | $ | 9,278 |  | $ | 47,608 |
2018 |  | $ | 18,387 |  | $ | 15,921 |  | $ | 11,124 |  | $ | 45,432 |
Percent of Total: |  |  |  |  |  |  |  |  |  |  |  |  |
2019 |  |  | 54 | % |  | 27 | % |  | 19 | % |  | 100 | %
2018 |  |  | 40 | % |  | 35 | % |  | 25 | % |  | 100 | %
Timing of revenue recognition (in thousands)
|  | Three months ended
|  | March 31, 2019 |  | March 31, 2018
Products and Licenses transferred at a point in time |  | $ | 31,861 |  | $ | 33,494
Services transferred over time |  |  | 15,747 |  |  | 11,938
Total Revenue |  | $ | 47,608 |  | $ | 45,432
Contract balances The following table provides information about receivables, contract assets and contract liabilities from contracts with customers.
|  | March 31, |  | December 31,
|  | 2019 |  | 2018
Receivables, inclusive of trade and unbilled |  | $ | 59,084 |  | $ | 59,631
Contract Assets (current and non-current) |  | $ | 8,699 |  | $ | 11,278
Contract Liabilities (Deferred Revenue current and non-current) |  | $ | 43,784 |  | $ | 44,305
Contract assets relate primarily to multi-year term license arrangements and the remaining contractual billings. These contract assets are transferred to receivables when the right to billing occurs, which is normally over 3-5 years. The contract liabilities primarily relate to the advance consideration received from customers for subscription and maintenance services. Revenue is recognized for these services over time. As a practical expedient, we do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised product or service to a customer and when the customer pays for that product or service will be one year or less. We do not typically include extended payment terms in our contracts with customers. During the three months ended March 31, 2019, the Company’s contract asset balances decreased approximately $2.6 million, primarily due to billings exceeding new term contracts during the period. Deferred revenue decreased in the same period due to timing of annual renewals. Transaction price allocated to the remaining performance obligations The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period.
in thousands |  | 2019 |  | 2020 |  | 2021 |  | Beyond 2021 |  | Total
Future revenue related to current unsatisfied performance obligations |  | $ | 6,615 |  | $ | 6,226 |  | $ | 4,090 |  | $ | 10,251 |  | $ | 27,182
The Company applies practical expedients and does not disclose information about remaining performance obligations (a) that have original expected durations of one year or less, or (b) where revenue is recognized as invoiced. Costs of obtaining a contract The Company incurs incremental costs related to commissions, which can be directly tied to obtaining a contract. The Company capitalizes commissions associated with certain new contracts and amortizes the costs over a period of benefit based on the transfer of goods or services that we have determined to be up to seven years. The Amortization is reflected in Sales and Marketing in the Statements of Operations. We determined the period of benefit by taking into consideration our customer contracts, our technology and other factors, including customer attrition. Commissions are earned upon receipt of payment by the customer and requires the employee to be a current employee. For contracts with multiple year payment terms, as the commissions that are payable after year 1 are payable based on continued employment, they are expensed when incurred. Commissions and amortization expense are included in Sales and Marketing expenses on the consolidated statements of operations. Applying the practical expedient, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period for the assets that the Company otherwise would have recognized is one year or less. These costs are included in Sales and Marketing expense in the consolidated statements of operations. The following tables provide information related to the capitalized costs and amortization recognized in the current and prior periods:
in thousands |  |  |  |  |  |  | March 31, 2019 |  |  | December 31, 2018
Capitalized costs to obtain contracts, current |  |  |  |  |  | $ | 459 |  | $ | 413
Capitalized costs to obtain contracts, non-current |  |  |  |  |  | $ | 2,307 |  | $ | 2,150
|  |  |  |  |  |  | Three months ended |  |  | Three months ended
in thousands |  |  |  |  |  |  | March 31, 2019 |  |  | March 31, 2018
Amortization of capitalized costs to obtain contracts |  |  |  |  |  | $ | 109 |  | $ | 65
Impairments of capitalized costs to obtain contracts |  |  |  |  |  | $ | - |  | $ | -

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 + Details
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