Annual report pursuant to Section 13 and 15(d)

Revenue from Contracts with Customers

v3.19.1
Revenue from Contracts with Customers
12 Months Ended
Jan. 31, 2019
Revenue From Contract With Customer [Abstract]  
Revenue from Contracts with Customers

10.

Revenue from Contracts with Customers

On February 1, 2018, we adopted ASC 606 using the modified retrospective method to achieve a consistent application of revenue recognition, resulting in a single revenue model to be applied by reporting companies under U.S. GAAP. Under the new model, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the providing entity expects to be entitled in exchange for those goods or services. Therefore, for arrangements that include customer-specified acceptance criteria, revenue is recognized when we can objectively determine that control has been transferred to the customer in accordance with the agreed-upon specifications in the contract, which may occur before formal customer acceptance. In addition, the new guidance requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new guidance no longer requires us to have vendor specific object evidence (“VSOE”) to determine the fair value of undelivered elements in a multiple-element software transaction, resulting in revenue attributable to the sale of software being recognized earlier.  

 

Our products and services facilitate the aggregation, licensing, management and distribution of video and advertising content to cable television system operators, telecommunication companies, satellite operators and media companies. Offerings include and revenue is generated from the sales of software, hardware, professional services, maintenance and support in order to deploy SeaChange systems and provide ongoing functionality. These offerings can be sold on a standalone basis or as a component of a contract with multiple performance obligations. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price. The performance obligations include future credits, significant discounts and material rights in addition to the software, hardware, professional services, maintenance and support.

 

The revenue for perpetual licenses to software applications and hardware is recognized upon delivery or acceptance by the customer. Product maintenance and technical support is recognized ratably over the stated and implied maintenance periods.

The professional services are either fixed price or time and material contracts, and consist of installation and integration, customized development and customized software, training, and on-site managed services. The installation and integration is recognized over time based on an input measure of hours incurred to total estimated hours. The customized development and software is recognized at a point in time upon delivery and acceptance of the final software product. The training and the on-site managed services are recognized over the service period.

 

Disaggregated Revenue

The following table shows our revenue disaggregated by revenue stream for the year ended January 31, 2019:

 

 

 

For the Years Ended January 31,

 

 

 

2019

 

 

2018

 

 

 

(Amounts in thousands)

 

Product

 

$

20,655

 

 

$

28,791

 

Professional services

 

 

13,908

 

 

 

18,316

 

Maintenance - first year

 

 

2,095

 

 

 

2,127

 

Maintenance - renewal

 

 

25,744

 

 

 

31,033

 

Total revenue

 

$

62,402

 

 

$

80,267

 

Transaction Price Allocated to Future Performance Obligations

 

The aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied or are partially satisfied as of January 31, 2019 is $24.2 million. This amount includes amounts billed for undelivered services that are included in deferred revenue.