4. 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:

Deferred Costs

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.

Remaining performance of deferred revenue (Restated)

As of October 31, 2021, the remaining performance obligations in deferred revenue totaled $34,289. The Company’s recognition of revenue in the future thereon will be as follows: