; ForgeRock, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Segment and Revenue Disclosures

v3.22.4
Segment and Revenue Disclosures
 12 Months Ended
Dec. 31, 2022
Revenue from Contract with Customer [Abstract]  
Segment and Revenue Disclosures Segment and Revenue Disclosures
Segment Reporting:
The Company operates in a single operating segment. An operating segment is defined as a component of an enterprise for which discrete financial information is available and is regularly reviewed by the chief operating decision maker (CODM). The Company’s CODM is its Chief Executive Officer as he is responsible for making decisions regarding resource allocation and assessing the Company’s performance.
Revenue by geographic region is based on the delivery address of the customer and is summarized in the below table (in thousands):
Year ended December 31,
2022 2021 2020
Americas $ 122,269 $ 94,225 $ 67,966
EMEA 72,771 60,472 43,847
APAC 22,472 22,236 15,821
Total Revenue $ 217,512 $ 176,933 $ 127,634
The Company’s revenue from the United States was $107.8 million, $85.3 million and $61.0 million, for the years ended 2022, 2021 and 2020, respectively. The Company’s revenue from the United Kingdom was $21.7 million, $17.1 million and $15.1 million, for the years ended December 31, 2022, 2021 and 2020, respectively. No other individual country exceeded 10% of the Company’s total annual revenue.
Disaggregation of revenue
The principal category the Company uses to disaggregate revenues is the nature of the Company’s products and services as presented in the consolidated statements of operations, the total of which is reconciled to the consolidated revenue from the Company’s single reportable segment. In the following table, revenue is presented by software license and service categories (in thousands):
Year ended December 31,
2022 2021 2020
Revenue:
Multi-year term licenses $ 52,918 $ 47,343 $ 29,193
1-year term licenses 34,374 37,268 35,125
Total subscription term licenses 87,292 84,611 64,318
Subscription SaaS, support & maintenance 119,003 85,434 57,833
Perpetual licenses 515 1,695 1,225
Total subscriptions and perpetual licenses 206,810 171,740 123,376
Professional services 10,702 5,193 4,258
Total revenue $ 217,512 $ 176,933 $ 127,634
Contract assets and deferred revenue
Contract assets and deferred revenue from contracts with customers were as follows (in thousands):
Year ended December 31,
2022 2021
Contract assets $ 25,242 $ 20,508
Deferred revenue 83,319 75,394
Generally, the Company invoices its customers at the time a customer enters into a binding contract. However, the Company may offer invoicing and payment installments for certain multi-year arrangements. In these instances, timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets are recorded when revenue is recognized prior to invoicing. Contract assets are transferred to accounts receivable upon customer invoicing. Beginning of the year contract asset amounts transferred to accounts receivable during the period were $15.3 million and $11.0 million for the years ended December 31, 2022 and 2021, respectively.
Deferred revenue is recorded when invoicing occurs before revenue is recognized. Deferred revenue recognized that was included in the deferred revenue balance at the beginning of the year was $68.2 million and $49.7 million for the years ended December 31, 2022 and 2021, respectively.
Remaining Performance Obligations
Remaining Performance Obligations (“RPO”) represents transaction price allocated to still unsatisfied or partially satisfied performance obligations. Those obligations are recorded as deferred revenue or are contractually stated or committed orders under multi-year billing plans for subscription and perpetual licenses, SaaS, or support and maintenance contracts for which the associated deferred revenue has not yet been recorded.
As of December 31, 2022, total remaining non-cancellable performance obligations under the Company’s subscriptions and perpetual license contracts with customers was approximately $225.1 million. Of this amount, the Company expects to recognize revenue of approximately $136.3 million or 61%, over the next 12 months, with the balance to be recognized as revenue thereafter.
The Company excludes the transaction price allocated to remaining performance obligations that have original expected durations of one year or less such as professional services and training.
Contract Costs
The following table summarizes the account activity of deferred commissions for the year ended December 31, 2022 and 2021:
Year ended December 31,
2022 2021
Beginning balance $ 24,058  $ 14,748 
Additions to deferred commissions 21,492  23,274 
Amortization of deferred commissions (15,235) (13,964)
Ending balance $ 30,315  $ 24,058 
Year ended December 31,
2022 2021
Deferred commissions, current $ 9,936  $ 8,457 
Deferred commissions, noncurrent 20,379  15,601 
Total deferred commissions $ 30,315  $ 24,058