; ForgeRock, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Segment and Revenue Disclosures

v3.21.2
Segment and Revenue Disclosures
9 Months Ended
Sep. 30, 2021
Revenue from Contract with Customer [Abstract]  
Segment and Revenue Disclosures Segment and Revenue Disclosures
Segment Reporting:
Revenue by geographic region is based on the delivery address of the customer and is summarized in the below table (in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Americas $ 21,123  $ 18,422  $ 66,689  $ 47,900 
EMEA 16,194  10,367  45,084  30,714 
APAC 6,909  3,334  17,256  8,880 
Total Revenue $ 44,226  $ 32,123  $ 129,029  $ 87,494 

The Company’s revenue from the United States was $18.8 million and $61.1 million, for the three and nine months ended September 30, 2021, respectively. The Company’s revenue from the United States was $16.7 million and $44.0 million, for the three and nine months ended September 30, 2020, respectively. The Company’s revenue from the United Kingdom was $5.0 million for the three months ended September 30, 2021. The Company’s revenue from the United Kingdom did not exceed 10% of the Company’s total revenue for the nine months ended September 30, 2021. The Company’s revenue from the United Kingdom was $3.4 million and $10.9 million for the three and nine months ended September 30, 2020, respectively. No other individual country exceeded 10% of the Company’s total quarterly or year to date 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 condensed consolidated statements of operations, the total of which is reconciled to the condensed consolidated revenue from the Company’s single reportable segment. In the following table, revenue is presented by software license and service categories (in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Revenue:
Multi-year term licenses $ 10,222  $ 7,162  $ 37,834  $ 17,440 
1-year term licenses
9,142  8,940  25,115  24,764 
Total subscription term licenses 19,364  16,102  62,949  42,204 
Subscription SaaS, support and maintenance 22,940  14,910  61,543  41,686 
42,304  31,012  124,492  83,890 
Perpetual licenses 183  158  885  739 
Total subscriptions and perpetual licenses 42,487  31,170  125,377  84,629 
Professional services 1,739  953  3,652  2,865 
Total Revenue $ 44,226  $ 32,123  $ 129,029  $ 87,494 
Contract assets and deferred revenue
Contract assets and deferred revenue from contracts with customers were as follows (in thousands):
September 30,
2021
December 31,
2020
Contract assets $ 23,630  $ 11,347 
Deferred revenue 57,190  55,504 
Contract assets are recorded when revenue is recognized prior to invoicing. Contract assets are transferred to accounts receivable upon customer invoicing. Beginning of the period contract asset amounts transferred to accounts receivable during the period were $3.1 million and $1.0 million for the three months ended September 30, 2021 and 2020, respectively and $8.0 million and $5.5 million for the nine months ended September 30, 2021 and 2020, respectively.
Revenue recognized that was included in the deferred revenue balance at the beginning of the period was $24.2 million and $17.5 million for the three months ended September 30, 2021 and 2020, respectively and $45.5 million and $33.4 million for the nine months ended September 30, 2021 and 2020, 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 contractually stated or committed orders under multi-year billing plans for subscription and perpetual licenses, Software as a Service “SaaS” and support and maintenance contracts for which the associated deferred revenue has not yet been recorded.
As of September 30, 2021, total remaining non-cancellable performance obligations under the Company’s subscriptions SaaS, support and maintenance contracts with customers was approximately $125.4 million. Of this amount, the Company expects to recognize revenue of approximately $77.6 million, or 62%, over the next 12 months, with the balance to be recognized as revenue thereafter.
Contract Costs
The following table summarizes the account activity of deferred commissions for the three and nine months ended September 30, 2021 and 2020:
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Beginning balance $ 17,055  $ 10,225  $ 14,748  $ 10,042 
Additions to deferred commissions 4,656  4,654  14,197  11,170 
Amortization of deferred commissions (3,202) (3,281) (10,436) (9,614)
Ending balance $ 18,509  $ 11,598  $ 18,509  $ 11,598 
September 30,
2021
December 31,
2020
Deferred commissions, current $ 6,267  $ 5,923 
Deferred commissions, noncurrent 12,242  8,825 
Total deferred commissions $ 18,509  $ 14,748 
Concentrations of Credit Risk and Significant Customers

The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments and accounts receivable. Cash and cash equivalents and short-term investments are currently held in one financial institution and, at times, may exceed federally insured limits.

As of September 30, 2021 and December 31, 2020, no single customer represented greater than 10% of accounts receivable. For the three and nine months ended September 30, 2021 and 2020, no single customer represented greater than 10% of revenue.