Revenues | 3. Revenues The Company accounts for revenues in accordance with ASU 2014-09, Revenue from Contracts from Customers (Topic 606) Revenue Recognition Performance Obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Certain of the Company’s contracts have multiple performance obligations, as the promise to transfer individual goods or services is separately identifiable from other promises in the contracts and, therefore, is distinct. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation based on its relative standalone selling price. The stand-alone selling prices are determined based on the prices at which the Company separately sells these products. For items that are not sold separately, the Company estimates the stand-alone selling prices using other observable inputs. The Company’s performance obligations are satisfied at a point in time or over time as the customer receives and consumes the benefits provided. Substantially all of the Company’s product sales revenues are recognized at a point in time. Substantially all of the Company’s service, subscription, and SaaS revenues are recognized over time. For revenues recognized over time, the Company uses an input measure, days elapsed, to measure progress. On December 31, 2021, the Company had $373.2 million of remaining performance obligations, which are primarily comprised of deferred maintenance and SaaS revenues. The Company expects to recognize approximately 38% of its deferred revenue as revenue in fiscal 2022, an additional 34% in fiscal 2023 and 28% of the balance thereafter. Contract Balances. The timing of revenue recognition, billings and cash collections results in billed accounts receivable and deferred revenue in the condensed consolidated balance sheets. Services provided under renewable support arrangements of the Company are billed in accordance with agreed-upon contractual terms, which are either billed fully at the inception of contract or at periodic intervals (e.g., quarterly or annually). The Company sometimes receives payments from its customers in advance of services being provided, resulting in deferred revenues. These liabilities are reported on the condensed consolidated balance sheets on a contract-by-contract basis at the end of each reporting period. Revenue recognized for the three months ended December 31, 2021 and 2020 that was included in the deferred revenue balance at the beginning of each period was $ 81.9 million and $ 68.8 million, respectively . Revenue recognized for the six months ended December 31, 2021 and 2020 that was included in the deferred revenue balance at the beginning of each period was $ 132.5 million and $ million, respectively. Contract Costs. The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. Management expects that commission fees paid to sales representatives as a result of obtaining service contracts and contract renewals are recoverable and therefore the Company’s condensed consolidated balance sheets included capitalized balances in the amount of $ 14.2 million and $13.1 million at December 31, 2021 and June 30, 2021, respectively. Capitalized commission fees are amortized on a straight-line basis over the average period of service contracts of approximately three years, and are included in “Sales and marketing” in the accompanying condensed consolidated statements of operations. Amortization recognized during the three months ended December 31, 2021 and 2020, was $1.8 million and $1.2 million, respectively. Amortization recognized during the six months ended December 31, 2021 and 2020, was $3.6 million and $2.5 million, respectively. Estimated Variable Consideration. There were no material changes in the current period to the estimated variable consideration for performance obligations, which were satisfied or partially satisfied during previous periods. Revenues by Category The Company operates in three geographic regions: Americas, which includes the United States, Canada, Mexico, Central America and South America; EMEA, which includes Europe, Russia, Middle East and Africa; and APAC, which includes Asia Pacific, China, South Asia and Japan. The following table sets forth the Company’s revenues disaggregated by sales channel and geographic region based on the billing addresses of its customers (in thousands): Three Months Ended December 31, 2021 December 31, 2020 Distributor Direct Total Distributor Direct Total Americas: United States $ 68,565 $ 68,585 $ 137,150 $ 46,506 $ 58,744 $ 105,250 Other 3,865 4,955 8,820 8,950 3,648 12,598 Total Americas 72,430 73,540 145,970 55,456 62,392 117,848 EMEA 68,934 42,128 111,062 69,602 34,220 103,822 APAC 5,034 18,867 23,901 2,793 17,665 20,458 Total net revenues $ 146,398 $ 134,535 $ 280,933 $ 127,851 $ 114,277 $ 242,128 Six Months Ended December 31, 2021 December 31, 2020 Distributor Direct Total Distributor Direct Total Americas: United States $ 124,633 $ 135,916 $ 260,549 $ 107,176 $ 116,091 $ 223,267 Other 11,664 8,322 19,986 17,191 7,738 24,929 Total Americas 136,297 144,238 280,535 124,367 123,829 248,196 EMEA 146,832 77,859 224,691 117,131 67,796 184,927 APAC 9,369 34,022 43,391 7,844 36,963 44,807 Total net revenues $ 292,498 $ 256,119 $ 548,617 $ 249,342 $ 228,588 $ 477,930 For the six months ended December 31, 2021, the Company generated 10% of its revenues from the Netherlands. For the three months ended December 31, 2020, the Company generated 11% of its revenues from the Netherlands and 11% of its revenues from Germany. For the six months ended December 31, 2020, the Company generated 10% of its revenues from the Netherlands and 10% of its revenues from Germany. No other foreign country accounted for 10% Customer Concentrations The Company performs ongoing credit evaluations of its customers and generally does not require collateral in exchange for credit. The following table sets forth customers accounting for 10% or more of the Company’s net revenues for the periods indicated below: Three Months Ended Six Months Ended December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 TD Synnex Corporation 21% 21% 22% 24% Jenne Corporation 18% 11% 16% 13% Westcon Group Inc. 11% 19% 15% 16% The following table sets forth customers accounting for 10% or more of the Company’s accounts receivable balance: December 31, 2021 June 30, 2021 TD Synnex Corporation 10% 19% Jenne Corporation * 24% * Less than 10% of accounts receivable. |