v3.23.2
Revenue, Deferred Revenue and Remaining Performance Obligations
 6 Months Ended
Jul. 31, 2023
Revenue from Contract with Customer [Abstract]  
Revenue, Deferred Revenue and Remaining Performance Obligations Revenue, Deferred Revenue and Remaining Performance Obligations
The following table summarizes revenue by region based on the shipping address of customers who have contracted to use the Company’s platform or service (in thousands, except percentages):
Three Months Ended July 31,Six Months Ended July 31,
2023202220232022
Amount% RevenueAmount% RevenueAmount% RevenueAmount% Revenue
United States$500,864 69 %$374,258 70 %$975,689 69 %$719,851 70 %
Europe, Middle East, and Africa111,909 15 %77,096 14 %216,461 15 %147,721 14 %
Asia Pacific75,198 10 %54,623 10 %147,417 10 %102,702 10 %
Other43,655 6 %29,176 6 %84,639 6 %52,713 6 %
Total revenue$731,626 100 %$535,153 100 %$1,424,206 100 %$1,022,987 100 %
No single country other than the United States represented 10% or more of the Company’s total revenue during the three and six months ended July 31, 2023 or July 31, 2022.
Contract Balances
Contract liabilities consist of deferred revenue and include payments received in advance of performance under the contract. Such amounts are recognized as revenue over the contractual period. The Company recognized revenue of $642.3 million and $454.1 million for the three months ended July 31, 2023 and July 31, 2022, respectively, and $1,089.9 million and $728.9 million for the six months ended July 31, 2023 and July 31, 2022, respectively, which was included in the corresponding contract liability balance at the beginning of the period.
The Company receives payments from customers based upon contractual billing schedules. Accounts receivable are recorded when the right to consideration becomes unconditional. Payment terms on invoiced amounts are typically 30 - 60 days. Contract assets include amounts related to the contractual right to consideration for both completed and partially completed performance obligations that may not have been invoiced.
Changes in deferred revenue were as follows (in thousands):
Three Months Ended July 31,Six Months Ended July 31,
2023202220232022
Carrying AmountCarrying Amount
Beginning balance$2,403,791 $1,692,597 $2,355,113 $1,529,321 
Additions to deferred revenue835,477 686,708 1,576,735 1,337,818 
Recognition of deferred revenue(731,626)(535,153)(1,424,206)(1,022,987)
Ending balance$2,507,642 $1,844,152 $2,507,642 $1,844,152 
Remaining Performance Obligations
The Company’s subscription contracts with its customers have a typical term of one to three years and most subscription contracts are non-cancelable. Customers generally have the right to terminate their contracts for cause as a result of the Company’s failure to perform. As of July 31, 2023, the aggregate amount of the transaction price allocated to remaining performance obligations was $3.6 billion. The Company expects to recognize approximately 64% of the remaining performance obligations in the 12 months following July 31, 2023, and 35% of the remaining performance obligations between 13 to 36 months, with the remainder to be recognized thereafter.
Costs to Obtain and Fulfill a Contract
The Company capitalizes referral fees paid to partners and sales commissions and associated payroll taxes paid to internal sales personnel, contractors or sales agents that are incremental to the acquisition of channel partner and direct customer contracts and would not have occurred absent the customer contract. These costs are recorded as deferred contract acquisition costs, current and deferred contract acquisition costs, noncurrent on the condensed consolidated balance sheets.
Sales commissions for renewal of a contract are not considered commensurate with the commissions paid for the acquisition of the initial contract or follow-on upsell given the substantive difference in commission rates in proportion to their respective contract values. Commissions, including referral fees paid to referral partners, earned upon the initial acquisition of a contract or subsequent upsell are amortized over an estimated period of benefit of four years, while commissions earned for renewal contracts are amortized over the contractual term of the renewals. Sales commissions associated with professional service contracts are amortized ratably over an estimated period of benefit of eight months and are included in sales and marketing expense in the condensed consolidated statements of operations. In determining the period of benefit for commissions paid for the acquisition of the initial contract, the Company took into consideration the expected subscription term and expected renewals of customer contracts, the historical duration of relationships with customers, customer retention data, and the life of the developed technology. The Company periodically reviews the carrying amount of deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit of these deferred costs. The Company did not recognize any material impairment losses of deferred contract acquisition costs during the three and six months ended July 31, 2023 and July 31, 2022.
The following table summarizes the activity of deferred contract acquisition costs (in thousands):
Three Months Ended July 31,Six Months Ended July 31,
2023202220232022
Beginning balance$441,298 $332,942 $447,088 $319,180 
Capitalization of contract acquisition costs74,942 57,586 124,474 108,940 
Amortization of deferred contract acquisition costs(57,555)(39,962)(112,877)(77,554)
Ending balance$458,685 $350,566 $458,685 $350,566 
Deferred contract acquisition costs, current$197,111 $148,125 $197,111 $148,125 
Deferred contract acquisition costs, noncurrent261,574 202,441 261,574 202,441 
Total deferred contract acquisition costs$458,685 $350,566 $458,685 $350,566