Quarterly report pursuant to Section 13 or 15(d)

Revenue

v3.21.2
Revenue
9 Months Ended
Oct. 31, 2021
Revenue from Contract with Customer [Abstract]  
Revenue
3.
Revenue

 

Software, subscription and support revenue

The Company sells a collective defense software solution that provides a near real time collective defense infrastructure that is comprised of two product offerings, IronDefense and IronDome. The software platform is delivered through both on-premises licenses bundled with on-premises hardware and through subscription software.

Our security appliance deliverables include proprietary operating system software and hardware, which together with regular threat intelligence updates and support, maintenance, and warranty. We combine intelligence dependent hardware and software licenses with the related threat intelligence and support and maintenance as a single performance obligation, as it delivers the essential functionality of our cybersecurity solution. As a result, we recognize revenue for this single performance obligation ratably over the expected term with the customer. Significant judgement is required for the assessment of material rights relating to renewal options associated with our contracts.

Revenue from subscriptions, which allow customers to use our security software over a contracted period without taking possession of the software, and managed services, where we provide managed detection and response services for customers, are recognized over the contractual term. The cloud- based subscription revenue, where we also provide hosting, recognized for the three months ended October 31, 2021 and 2020 was $3,792 and $2,180, respectively, and for the nine months ended October 31, 2021 and 2020, were $10,993 and $6,475, respectively. Overall subscription revenue recognized for the three months ended October 31, 2021 and 2020, were $6,092 and $4,432, respectively, and for the nine months ended October 31, 2021 and 2020 were $17,992 and $13,231, respectively.

 

Professional services revenue

The Company sells professional services, including cyber operations monitoring, security, training and tailored maturity assessments. Revenue derived from these services is recognized as the services are delivered.

 

Customer concentration

 

For the nine months ended October 31, 2021, and 2020, two customers accounted for 22%, or $4,283, and one customer accounted for 10%, or $2,174, of the Company’s revenue, respectively. As of October, 2021, and January 31, 2021, three customers represent 60% of the total accounts receivable, and as of January 31, 2021, three customers represented 85% of the total accounts receivable balance.

Significant customers are those which represent at least 10% of the Company’s total revenue at each respective period ending date. The following table presents customers that represent 10% or more of the Company’s total revenue:

 

 

For the Three Months Ended October 31,

 

For the Nine Months Ended October 31,

 

2021

 

2020

 

2021

 

2020

Customer A

12%

 

*

 

11%

 

*

Customer B

11%

 

15%

 

11%

 

*

Customer C

*

 

*

 

*

 

10%

 

23%

 

15%

 

22%

 

10%

 

* - less than 10%

 

Deferred Costs

The Company defers contract fulfillment costs that include appliance hardware. The balances in deferred costs are as follows:

 

Balance at February 1, 2021

 

$

2,805

 

Cost of revenue recognized

 

 

(1,033

)

Costs deferred

 

 

473

 

Foreign exchange

 

 

(3

)

Balance at October 31, 2021

 

$

2,242

 

Balance at February 1, 2020

 

 

3,080

 

Cost of revenue recognized

 

 

(832

)

Costs deferred

 

 

711

 

Foreign exchange

 

 

(3

)

Balance at October 31, 2020

 

$

2,956

 

 

The balance of deferred commissions at October 31, 2021 and January 31, 2021 were $1,494 and $1,319, respectively. Deferred commissions are included in the deferred costs on the condensed consolidated balance sheets, of which $1,061 is current and $433 is long-term as of October 31, 2021.

 

Deferred revenue

Deferred revenue represents amounts received from and/or billed to customers in excess of revenue recognized. Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue depending on whether the revenue recognition criteria have been met.

The balance in deferred revenue is as follows:

 

Balance at February 1, 2021

 

$

34,044

 

Revenue recognized

 

 

(23,687

)

Revenue deferred

 

 

19,765

 

Foreign exchange

 

 

(12

)

Balance at October 31, 2021

 

$

30,110

 

Balance at February 1, 2020

 

 

20,312

 

Revenue recognized

 

 

(19,507

)

Revenue deferred

 

 

22,196

 

Foreign exchange

 

-

 

Balance at October 31, 2020

 

$

23,001

 

 

Remaining performance of deferred revenue

As of October 31, 2021, the remaining performance of deferred revenue totaled $30,110. The Company’s recognition of revenue in the future thereon will be as follows:

 

Years Ending January 31,

 

 

 

2022 (3 months)

 

$

5,243

 

2023

 

 

10,770

 

2024

 

 

8,174

 

2025

 

 

4,371

 

2026

 

 

1,552

 

 

 

$

30,110