| Revenue | Revenue Significant Accounting Policy We account for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (ASC Topic 606), which we adopted on January 1, 2018, using the modified retrospective method. Revenue is measured based on the consideration specified in a contract with a customer. Most of our contracts with customers contain transaction prices with fixed consideration, however, some contracts may contain variable consideration in the form of discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, penalties and other similar items. When a contract includes variable consideration, we evaluate the estimate of variable consideration to determine whether the estimate needs to be constrained; therefore, we include the variable consideration in the transaction price only to the extent that it is probable that a significant reversal of the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. We recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer. This can result in recognition of revenue over time as we perform services or at a point in time when the deliverable is transferred to the customer, depending on an evaluation of the criteria for over time recognition in ASC Topic 606. Further details regarding our revenue recognition for various revenue streams are discussed below. Nature of goods and services Over 90% of our revenue is derived from services provided to our customers for training, consulting, technical, engineering and other services. Less than 10% of our revenue is derived from various other offerings including custom magazine publications and assembly of glovebox portfolios for automotive manufacturers, licenses of software and other intellectual property, and software as a service (SaaS) arrangements. Our primary contract vehicles are time-and-materials, fixed price (including fixed-fee per transaction) and cost-reimbursable contracts. Each contract has different terms based on the scope, deliverables and complexity of the engagement, requiring us to make judgments and estimates about recognizing revenue. Under time-and-materials and cost-reimbursable contracts, the contractual billing schedules are based on the specified level of resources we are obligated to provide. Revenue under these contract types are recognized over time as services are performed as the client simultaneously receives and consumes the benefits provided by our performance throughout the engagement. The time and materials incurred for the period is the measure of performance and, therefore, revenue is recognized in that amount. For fixed price contracts which typically involve a discrete project, such as development of training content and materials, design of training processes, software implementation, or engineering projects, the contractual billing schedules are not necessarily based on the specified level of resources we are obligated to provide. These discrete projects generally do not contain milestones or other measures of performance. The majority of our fixed price contracts meet the criteria in ASC Topic 606 for over time revenue recognition. For these contracts, revenue is recognized using a percentage-of-completion method based on the relationship of costs incurred to total estimated costs expected to be incurred over the term of the contract. We believe this methodology is a reasonable measure of proportional performance since performance primarily involves personnel costs and services provided to the customer throughout the course of the projects through regular communications of progress toward completion and other project deliverables. In addition, the customer is required to pay us for the proportionate amount of our fees in the event of contract termination. A small portion of our fixed price contracts do not meet the criteria in ASC Topic 606 for over time revenue recognition. For these projects, we defer revenue recognition until the performance obligation is satisfied, which is generally when the final deliverable is provided to the client. The direct costs related to these projects are capitalized and then recognized as cost of revenue when the performance obligation is satisfied. For fixed price contracts, when total direct cost estimates exceed revenues, the estimated losses are recognized immediately. The use of the percentage-of-completion method requires significant judgment relative to estimating total contract costs, including assumptions relative to the length of time to complete the project, the nature and complexity of the work to be performed, and anticipated changes in estimated salaries and other costs. Estimates of total contract costs are continuously monitored during the term of the contract, and recorded revenues and costs are subject to revision as the contract progresses. When revisions in estimated contract revenues and costs are determined, such adjustments are recorded in the period in which they are first identified. Adjustments to our contracts were not material, individually or in the aggregate, to our unaudited condensed consolidated financial statements for the three or six-month periods ended June 30, 2018 and 2017. For certain fixed-fee per transaction contracts, such as delivering training courses or conducting workshops, revenue is recognized during the period in which services are delivered in accordance with the pricing outlined in the contracts. For certain fixed-fee per transaction and fixed price contracts in which the output of the arrangement is measurable, such as for the shipping of publications and print materials, revenue is recognized at the point in time at which control is transferred which is upon delivery. Taxes assessed by a government authority that are both imposed on and concurrent with a specific revenue-producing transaction, that we collect from a customer, are excluded from revenue. 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 ASC 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. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. As of June 30, 2018 , we had $268.8 million of remaining performance obligations, which we also refer to as total backlog. We expect to recognize over 95 percent of our remaining performance obligations as revenue within the next twelve months. We did not apply any of the practical expedients permitted by ASC Topic 606 in determining the amount of our performance obligations as of June 30, 2018 . Revenue by Category The following series of tables presents our revenue disaggregated by various categories (dollars in thousands). Three Months Ended June 30, Workforce Excellence Business Transformation Services Consolidated 2018 2017 2018 2017 2018 2017 Revenue by type of service: Managed learning services $ 50,418 $ 49,213 $ — $ — $ 50,418 $ 49,213 Engineering & technical services 29,838 26,819 — — 29,838 26,819 Sales enablement — — 27,799 28,371 27,799 28,371 Organizational development — — 25,636 26,758 25,636 26,758 $ 80,256 $ 76,032 $ 53,435 $ 55,129 $ 133,691 $ 131,161 Revenue by geographic region: Americas $ 51,509 $ 47,718 $ 47,174 $ 50,911 $ 98,683 $ 98,629 Europe Middle East Africa 24,605 26,019 8,538 5,846 33,143 31,865 Asia Pacific 8,489 6,943 117 145 8,606 7,088 Eliminations (4,347 ) (4,648 ) (2,394 ) (1,773 ) (6,741 ) (6,421 ) $ 80,256 $ 76,032 $ 53,435 $ 55,129 $ 133,691 $ 131,161 Revenue by client market sector: Automotive $ 2,818 $ 2,411 $ 28,476 $ 28,440 $ 31,294 $ 30,851 Financial & Insurance 22,010 20,017 4,292 4,920 26,302 24,937 Manufacturing 8,662 8,978 3,978 4,917 12,640 13,895 Energy / Oil & Gas 10,701 8,657 953 555 11,654 9,212 U.S. Government 6,468 5,802 2,361 2,368 8,829 8,170 U.K. Government 4,947 8,202 — — 4,947 8,202 Information & Communication 3,811 4,033 2,850 3,706 6,661 7,739 Aerospace 6,834 5,307 970 1,657 7,804 6,964 Electronics Semiconductor 3,822 3,961 234 95 4,056 4,056 Life Sciences 2,903 2,273 2,602 2,497 5,505 4,770 Other 7,280 6,391 6,719 5,974 13,999 12,365 $ 80,256 $ 76,032 $ 53,435 $ 55,129 $ 133,691 $ 131,161 Six Months Ended June 30, Workforce Excellence Business Transformation Services Consolidated 2018 2017 2018 2017 2018 2017 Revenue by type of service: Managed learning services $ 99,320 $ 94,542 $ — $ — $ 99,320 $ 94,542 Engineering & technical services 55,367 53,033 — — 55,367 53,033 Sales enablement — — 51,649 52,988 51,649 52,988 Organizational development — — 52,387 53,045 52,387 53,045 $ 154,687 $ 147,575 $ 104,036 $ 106,033 $ 258,723 $ 253,608 Revenue by geographic region: Americas $ 96,949 $ 92,658 $ 91,356 $ 97,309 $ 188,305 $ 189,967 Europe Middle East Africa 49,562 49,610 17,035 11,599 66,597 61,209 Asia Pacific 16,200 14,073 189 257 16,389 14,330 Eliminations (8,024 ) (8,766 ) (4,544 ) (3,132 ) (12,568 ) (11,898 ) $ 154,687 $ 147,575 $ 104,036 $ 106,033 $ 258,723 $ 253,608 Revenue by client market sector: Automotive $ 5,656 $ 4,669 $ 52,822 $ 53,297 $ 58,478 $ 57,966 Financial & Insurance 43,113 38,603 8,362 10,379 51,475 48,982 Manufacturing 17,341 17,253 8,587 9,178 25,928 26,431 Energy / Oil & Gas 18,343 17,707 2,428 1,542 20,771 19,249 U.S. Government 12,922 11,955 4,747 4,911 17,669 16,866 U.K. Government 10,433 14,932 — — 10,433 14,932 Information & Communication 7,110 8,013 5,225 6,428 12,335 14,441 Aerospace 14,432 10,346 1,731 3,170 16,163 13,516 Electronics Semiconductor 7,505 8,324 285 490 7,790 8,814 Life Sciences 4,752 3,997 5,310 4,992 10,062 8,989 Other 13,080 11,776 14,539 11,646 27,619 23,422 $ 154,687 $ 147,575 $ 104,036 $ 106,033 $ 258,723 $ 253,608 Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled revenue (contract assets), and deferred revenue (contract liabilities) on the condensed consolidated balance sheet. Amounts charged to our clients become billable according to the contract terms, which usually consider the passage of time, achievement of milestones or completion of the project. When billings occur after the work has been performed, such unbilled amounts will generally be billed and collected within 60 to 120 days but typically no longer than over the next twelve months. When we advance bill clients prior to the work being performed, generally, such amounts will be earned and recognized in revenue within the next twelve months. These assets and liabilities are reported on the condensed consolidated balance sheet on a contract-by-contract basis at the end of each reporting period. Changes in the contract asset and liability balances during the six-month period ended June 30, 2018 were not materially impacted by any other factors. Revenue recognized for the six months ended June 30, 2018 , that was included in the contract liability balance at the beginning of the year was $16.3 million , and primarily represented revenue from services performed during the current period for which we received advance payment from clients in a prior period. Contract Costs Costs to fulfill contracts which do not meet the over time revenue recognition criteria are capitalized and recognized to cost of revenue when the performance obligation is satisfied and revenue is recognized. Such costs are included in prepaid expenses and other current assets on the condensed consolidated balance sheet and totaled $1.2 million as of June 30, 2018 . Recognition of such contract costs totaled $4.1 million for the six months ended June 30, 2018 and is included in cost of revenue on the condensed consolidated statements of operations. Applying the practical expedient in ASC Topic 606, we recognize the incremental costs of obtaining contracts (i.e. sales commissions) as an expense when incurred if the amortization period of the assets that we otherwise would have recognized is one year or less. Substantially all of our sales commission arrangements have an amortization period of one year or less. As of June 30, 2018 , we did not have any capitalized sales commissions. |
