Note 4 – Revenue

We recognize revenue in accordance with ASC 606 “Revenue from Contracts with Customers” (“Topic 606”), as described below.

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 June 30,				Six months ended June 30,
	2019		2018		2019		2018
Hardware products	$	29,039	$	24,576	$	53,329	$	42,067
Software licenses		11,078		10,410		18,649		26,413
Subscription		5,338		3,818		10,589		6,788
Professional services		848		1,157		1,657		2,121
Maintenance, support and other		9,931		9,593		19,618		17,597
Total Revenue	$	56,234	$	49,554	$	103,842	$	94,986

Revenue by location of customer for the three months ended June 30, 2019 and 2018 (in thousands)


	EMEA			Americas			APAC			Total
Total Revenue:
2019	$	33,841		$	14,426		$	7,967		$	56,234
2018	$	21,481		$	13,270		$	14,803		$	49,554

Percent of Total:
2019		60	%		26	%		14	%		100	%
2018		43	%		27	%		30	%		100	%

Revenue by location of customer for the six months ended June 30, 2019 and 2018 (in thousands)



	EMEA			Americas			APAC			Total
Total Revenue:
2019	$	59,440		$	27,157		$	17,245		$	103,842
2018	$	39,867		$	29,191		$	25,928		$	94,986

Percent of Total:
2019		57	%		26	%		17	%		100	%
2018		42	%		31	%		27	%		100	%

Timing of revenue recognition (in thousands)


	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Products, Licenses transferred at a point in time	$	40,117	$	34,986	$	71,978	$	68,480
Services transferred over time		16,117		14,568		31,864		26,506
Total Revenue	$	56,234	$	49,554	$	103,842	$	94,986

Contract balances

The following table provides information about receivables, contract assets and contract liabilities from contracts with customers.


	June 30,		December 31,
	2019		2018
Receivables, inclusive of trade and unbilled	$	68,185	$	59,631
Contract Assets (current and non-current)	$	7,154	$	11,278
Contract Liabilities (Deferred Revenue current and non-current)	$	42,495	$	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.

Revenue recognized during the three and six months ended June 30, 2019 included $6.6 million and $15.3 million, respectively, that was included on the December 31, 2018 balance sheet in contract liabilities. During the six months ended June 30, 2019, the Company’s contract asset balances decreased approximately $4.1 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	$	6,961	$	9,327	$	5,183	$	11,443	$	32,914

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		June 30, 2019		December 31, 2018
Capitalized costs to obtain contracts, current	$	533	$	413
Capitalized costs to obtain contracts, non-current	$	2,402	$	2,150


		Three months ended June 30,				Six months ended June 30,
in thousands		2019		2018		2019		2018
Amortization of capitalized costs to obtain contracts	$	113	$	60	$	222	$	125
Impairments of capitalized costs to obtain contracts	$	-	$	-	$	-	$	-