v3.25.2
Contract Costs
 6 Months Ended
Jun. 30, 2025
Capitalized Contract Cost [Abstract]  
Contract Costs Revenue from Contracts with Customers
Disaggregation of Revenue from Contracts with Customers
The following table presents a disaggregation of revenue:
Three Months Ended June 30,Six Months Ended June 30,
in millions20252024*20252024*
United States
Recurring$187 $201 $382 $423 
Perpetual software licenses and hardware1 1 5 6 
Consulting services13 19 28 40 
Total United States201 221 415 469 
International
Recurring$167 $167 $330 $333 
Perpetual software licenses and hardware2 4 8 7 
Consulting services38 44 73 92 
Total International207 215 411 432 
Total Revenue$408 $436 $826 $901 
* Prior period information has been reclassified to conform to the current period presentation.
Rental revenue, which is included in recurring revenue in the above table, was as follows:
Three Months Ended June 30,Six Months Ended June 30,
in millions2025202420252024
Rental revenue* $51 $54 $100 $109 
*Rental revenue includes hardware maintenance.
Contract Balances
The timing of revenue recognition, billings and cash collections results in billed accounts receivable, contract assets, and customer advances and deposits (deferred revenue or contract liabilities) on the condensed consolidated balance sheet. Accounts receivable include amounts due from customers that are unconditional. Contract assets relate to the Company’s rights to consideration for goods delivered or services completed and recognized as revenue but billing and the right to receive payment is conditional upon the completion of other performance obligations. Contract assets are included in other current assets on the balance sheet and are transferred to accounts receivable when the rights become unconditional. Deferred revenue consists of advance payments and billings in excess of revenue recognized. Deferred revenue is classified as either current or noncurrent based on the timing of when the Company expects to recognize revenue. These assets and liabilities are reported on a contract-by-contract basis at the end of each reporting period.
The following table provides information about receivables, contract assets and deferred revenue from contracts with customers:
As of
in millionsJune 30, 2025December 31, 2024
Accounts receivable, net$293 $234 
Contract assets$3 $4 
Current deferred revenue$521 $512 
Long-term deferred revenue$12 $10 
Revenue recognized during the six months ended June 30, 2025 from amounts included in deferred revenue at the beginning of the period was $344 million.
Transaction Price Allocated to Unsatisfied Obligations
The following table includes estimated revenue expected to be recognized in the future related to the Company's unsatisfied (or partially satisfied) obligations at June 30, 2025:
in millionsTotal at June 30, 2025Year 1Year 2 and Thereafter
Remaining unsatisfied obligations$1,841 $1,233 $608 
The amounts above represent the price of firm orders for which work has not been performed or goods have not been delivered and exclude unexercised contract options outside the stated contractual term that do not represent material rights to the customer. Although the Company believes that the contract value in the above table is firm, approximately $985 million of the amount is under contracts that are subject to customer-only general cancellation for convenience terms that the Company is contractually obligated to perform unless the customer notifies us of cancellation. The Company expects to recognize revenue of approximately $453 million in the next year from contracts that are non-cancelable. The Company believes the inclusion of this information is important to understanding the obligations that the Company is contractually required to perform and provides useful information regarding remaining obligations related to these executed contracts.Contract Costs
The Company capitalizes sales commissions and other contract costs that are incremental direct costs of obtaining customer contracts if the expected amortization period of the asset is greater than one year. These costs are recorded in capitalized contract costs, net on the Company’s balance sheet. The capitalized amounts are calculated based on the annual recurring revenue and contract value for individual multi-term contracts. The judgments made in determining the amount of costs incurred include whether the commissions are in fact incremental and would not have occurred absent the customer contract. Costs to obtain a contract are amortized as selling, general and administrative expenses on a straight-line basis over the expected period of benefit, which is typically around four years. These costs are periodically reviewed for impairment. The following table identifies the activity relating to capitalized contract costs:
in millionsDecember 31, 2024CapitalizedAmortizationJune 30, 2025
Capitalized contract costs$46 $3 $(12)$37 
in millionsDecember 31, 2023CapitalizedAmortizationJune 30, 2024
Capitalized contract costs$68 $2 $(18)$52