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Revenue and Deferred Revenue
 6 Months Ended
Jul. 31, 2020
Revenue From Contract With Customer [Abstract]  
Revenue and Deferred Revenue

Note 2:  Revenue and Deferred Revenue

The Company’s revenue is presented in accordance with the provisions under Topic 606. The Company derives its revenue from two sources:

Subscription and Services Revenue is derived primarily from recurring subscription fees related to service plans such as Ooma Business, Ooma Residential and other communications services. Service plans are generally sold as monthly subscriptions; however, certain plans are also offered as annual or multi-year subscriptions. Subscription revenue is generally recognized ratably over the contractual service term.

Product and Other Revenue is generated from the sale of on-premise appliances and end-point devices, including shipping and handling fees for direct customers, and to a lesser extent from porting fees that enable customers to transfer their existing phone numbers. The Company recognizes revenue from sales to direct end-customers and channel partners at the point-in-time that control transfers, which is typically when it delivers the product or when all customer contractual provisions have been met, if any.

Revenue disaggregated by revenue source consisted of the following (in thousands):

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

July 31,

2020

 

 

July 31,

2019

 

 

July 31,

2020

 

 

July 31,

2019

 

Subscription and services revenue

 

$

38,500

 

 

$

34,469

 

 

$

76,116

 

 

$

65,581

 

Product and other revenue

 

 

2,912

 

 

 

2,874

 

 

 

5,602

 

 

 

5,769

 

Total revenue

 

$

41,412

 

 

$

37,343

 

 

$

81,718

 

 

$

71,350

 

The Company derived approximately 55% and 59% of its total revenue from Ooma Residential and approximately 43% and 38% from Ooma Business for the three months ended July 31, 2020 and 2019, respectively. The Company derived approximately 55% and 62% of its total revenue from Ooma Residential and approximately 43% and 36% from Ooma Business for the six months ended July 31, 2020 and 2019, respectively. 

No individual country outside of the United States represented 10% or more of total revenue for the periods presented. No single customer accounted for 10% or more of total revenue for the periods presented.

As of July 31, 2020, one customer accounted for 15% of the Company’s net accounts receivable balance. As of January 31, 2020, no single customer accounted for 10% or more of net accounts receivable. 

Deferred Revenue primarily consists of billings or payments received in advance of meeting revenue recognition criteria. Deferred services revenue is recognized on a ratable basis over the term of the contract as the services are provided.

Deferred revenue consisted of the following (in thousands):

 

 

 

 

As of

 

 

 

 

 

July 31,

2020

 

 

January 31,

2020

 

Subscription and services

 

 

 

$

16,316

 

 

$

15,892

 

Product and other

 

 

 

 

73

 

 

 

79

 

Total deferred revenue

 

 

 

$

16,389

 

 

 

15,971

 

Less: current deferred revenue

 

 

 

 

16,270

 

 

 

15,797

 

Non-current deferred revenue included in other long-term liabilities

 

 

 

$

119

 

 

$

174

 

During the three and six months ended July 31, 2020, the Company recognized revenue of approximately $3.0 million and $12.3 million, respectively, pertaining to amounts deferred as of January 31, 2020. As of July 31, 2020, the Company’s deferred revenue balance was primarily composed of subscription contracts that were invoiced during the first six months of fiscal 2021, as well as amounts recorded during fiscal 2020 for annual contracts.

Remaining Performance Obligations. As of July 31, 2020, contract revenue that has not yet been recognized for open contracts with an original expected length of greater than one year was approximately $8.1 million. The Company expects to recognize revenue on approximately 52% of this amount over the next 12 months, with the balance to be recognized thereafter.