3. REVENUE
Deferred Revenue
Revenue recognized during the years ended December 31, 2025, 2024, and 2023, which was included in the corresponding deferred revenue balance at the beginning of each year, was $160.4 million, $137.1 million, and $116.0 million.
Remaining Performance Obligations
Remaining performance obligations represent contracted revenue that has not yet been recognized, which includes deferred revenue in the Consolidated Balance Sheets and unbilled amounts that will be recognized as revenue in future periods. As of December 31, 2025, we had remaining performance obligations of $342.6 million and expect to recognize approximately 72% as revenue over the next 12 months and the remainder thereafter.
Costs to Obtain and Fulfill Contracts
The following table presents our capitalization and amortization of commissions and related payroll tax expenditures recorded within sales and marketing in the Consolidated Statements of Operations:
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| Commissions and related payroll tax expenditures: | 2025 | | 2024 | | 2023 |
| Capitalization | $ | 11.7 | | | $ | 15.0 | | | $ | 17.1 | |
| Amortization | 15.4 | | | 15.1 | | | 12.3 | |
Deferred commissions and related payroll tax expenditures, which are included in deferred costs and other assets, were as follows:
| | | | | | | | | | | |
| December 31, 2025 | | December 31, 2024 |
| Deferred costs, net | $ | 12.8 | | | $ | 13.8 | |
| Other assets | 11.9 | | | 14.6 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.