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Revenue

9 Months Ended

Sep. 30, 2020

Note 3 – 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 September 30,						Nine months ended September 30,
			2020			2019			2020			2019
Hardware products			$	21,687		$	42,027		$	65,613		$	95,356
Software licenses				8,562			19,188			38,280			37,319
Subscription				7,446			5,556			19,286			16,163
Professional services				1,353			2,338			4,100			3,995
Maintenance, support and other				12,391			10,582			35,484			30,120
Total Revenue			$	51,439		$	79,691		$	162,763		$	182,953

Revenue by location of customer for the three months ended September 30, 2020 and 2019 (in thousands)


		EMEA			Americas			APAC			Total
Total Revenue:
2020		$	26,684		$	12,305		$	12,450		$	51,439
2019		$	48,694		$	15,605		$	15,392		$	79,691

Percent of Total:
2020			52	%		24	%		24	%		100	%
2019			61	%		20	%		19	%		100	%

Revenue by location of customer for the nine months ended September 30, 2020 and 2019 (in thousands)


		EMEA			Americas			APAC			Total
Total Revenue:
2020		$	88,624		$	38,570		$	35,569		$	162,763
2019		$	107,554		$	42,762		$	32,637		$	182,953

Percent of Total:
2020			54	%		24	%		22	%		100	%
2019			59	%		23	%		18	%		100	%

Timing of revenue recognition (in thousands)


	Three months ended September 30,						Nine months ended September 30,
	2020			2019			2020			2019
Products and Licenses transferred at a point in time	$	30,249		$	61,215		$	103,893		$	132,675
Services transferred over time		21,190			18,476			58,870			50,278
Total Revenue	$	51,439		$	79,691		$	162,763		$	182,953

Contract balances

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


			September 30,			December 31,
		2020			2019
Receivables, inclusive of trade and unbilled		$	54,475		$	62,405
Contract Assets (current and non-current)		$	8,938		$	8,595
Contract Liabilities (Deferred Revenue current and non-current)		$	49,251		$	45,597

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 nine months ended September 30, 2020 included $29.2 million that was included on the December 31, 2019 balance sheet in contract liabilities. Deferred revenue increased 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		2020			2021			2022			Beyond 2022			Total
Future revenue related to current unsatisfied performance obligations		$	3,418		$	11,820		$	8,825		$	12,686		$	36,749

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 invoicing to the customer. 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 condensed 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 condensed 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				September 30, 2020			December 31, 2019
Capitalized costs to obtain contracts, current			$	1,054		$	676
Capitalized costs to obtain contracts, non-current			$	4,871		$	3,222


				Three months ended September 30,						Nine months ended September 30,
in thousands				2020			2019			2020			2019
Amortization of capitalized costs to obtain contracts			$	251		$	110		$	620		$	329
Impairments of capitalized costs to obtain contracts			$	-		$	-		$	-		$	-