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Revenue and Deferred Revenue
 6 Months Ended
Jul. 31, 2024
Revenue from Contract with Customer [Abstract]  
Revenue and Deferred Revenue

Note 2: Revenue and Deferred Revenue

The Company derives its revenue from two sources:

Subscription and Services Revenue is derived 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. A small portion of revenue is recognized on a point-in-time basis from services such as: prepaid international calls, and advertisements displayed through the Talkatone mobile application.

Product and Other Revenue is generated primarily from the sale of on-premise devices and end-point devices, including Ooma AirDial, and to a lesser extent from porting fees that enable customers to transfer their existing phone numbers. The Company recognizes product and other revenue from sales to direct end-customers and channel partners at the point-in-time that control is transferred.

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

 

 

Three Months Ended

 

Six Months Ended

 

 

July 31,
2024

 

 

July 31,
2023

 

July 31,
2024

 

July 31,
2023

Subscription and services revenue

 

$

59,566

 

$

54,726

 

$

117,955

 

$

107,775

Product and other revenue

 

 

4,563

 

 

3,627

 

 

8,673

 

 

7,430

Total revenue

 

$

64,129

 

$

58,353

 

$

126,628

 

$

115,205

The Company derived approximately 61% and 57% of its total revenue from Ooma Business and approximately 36% and 41% from Ooma Residential for the three months ended July 31, 2024 and 2023, respectively. The Company derived approximately 61% and 56% of its total revenue from Ooma Business and approximately 37% and 41% from Ooma Residential for the six months ended July 31, 2024 and 2023, respectively. No individual country outside of the United States, and no single customer, represented 10% or more of total revenue for the periods presented.

Customers who represented 10% or more of net accounts receivable were as follows:

 

 

 

 

 

As of

 

 

 

 

 

July 31,
2024

 

 

January 31,
2024

Customer A

 

 

 

 

18%

 

 

33%

 

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.

 

 

 

 

As of

 

 

 

 

July 31,
2024

 

January 31,
2024

Subscription and services

 

 

 

$

17,131

 

$

17,034

Product and other

 

 

 

 

10

 

 

22

Total deferred revenue

 

 

 

$

17,141

 

 

17,056

Less: current deferred revenue

 

 

 

 

17,123

 

 

17,041

Deferred revenue, non-current

 

 

 

$

18

 

$

15

During the three and six months ended July 31, 2024, the Company recognized revenue of approximately $3.0 million and $13.9 million, respectively pertaining to amounts deferred as of January 31, 2024. As of July 31, 2024, deferred revenue was primarily composed of subscription contracts invoiced during the first half of fiscal 2025, as well as amounts recorded during fiscal 2024 for annual contracts.

Remaining Performance Obligations. As of July 31, 2024, contract revenue that had not yet been recognized for open contracts with an original expected length of greater than one year was approximately $34.6 million. The Company expects to recognize revenue on approximately 41% of this amount over the next 12 months, with the balance to be recognized thereafter.